8th Pay Commission: How basic salary of Level 6 employees may double in 7 years after DA merger?

The 8th Pay Commission’s discussions with employee and pensioner bodies and other stakeholders in Puducherry began today (Wednesday, September 9, 2026). The pay commission has just concluded similar meetings in Chennai and will have its next round of discussions in Chandigarh from September 16-18, 2026. In various discussions that have taken place and in the memorandum that employee and pensioner bodies have submitted to the 8th Pay Commission, a key demand that has been raised by many key bodies is the merger of dearness allowance (DA) with basic pay.

Why do employee and pensioner bodies want the merger of DA with basic pay?

Leading central government employee organisations such as the National Council – Joint Consultative Machinery (NC-JCM), the All India Defence Employees’ Federation (AIDEF) and the All India New Pension Scheme Employees’ Federation (AINPSEF) among others have recommended the merger of DA with basic pay when DA crosses the 25% stage.


Under the current system, the Finance Ministry increases the DA of all central government employees twice a year- in January and June. However, it doesn’t merge DA with employees’ basic pay at any stage.

Also Read: 8th Pay Commission fitment factor vs higher annual increment rate: Which may benefit employees earning Rs 35,000 basic pay?

The AINPSEF says that the merger of DA with basic pay will help increase the salary at a quicker pace, and employees don’t have to wait for 10 years for a good salary raise.

The AINPSEF says that the merger will mainly help employees working at low levels, who get low salaries and reside in big cities where expenses are high.

DA merger recommendations for 8th Pay Commission

Organisation	Proposed Annual Increment	Proposed DA
National Council of the Joint Consultative Machinery (NC-JCM)	6%	All allowances to be increased by three times and to be linked with DA increase
National Federation of Postal Employees (NFPE)	6%	At 25%, DA should be merged with basic pay
All India New Pension Scheme Employees Federation (AINPSEF)	7%	At 25%, DA should be merged with basic pay
Indian Railways' Supervisors' Association (IRTSA)	5%	At 50%, DA should be merged with basic pay
Pragatisheel Shikshak Nyaya Manch (PSNM)	7%	At 50%, DA should be merged with basic pay
All India Defence Employees' Federation (AIDEF)	6%	All allowances to be increased by three times and to be linked with DA increase

How DA merger with basic pay can work in practice

The NC-JCM, in its memorandum submitted to the 8th Pay Commission, says that when DA crosses the 25% limit, it should be merged with basic pay. Now let’s see how it may work in practice.

Take the example of a Level 1 employee earning a basic pay of Rs 18,000. Assuming that the 8th Pay Commission’s fitment factor will be 2.1, their revised salary may be Rs 37,800 as of January 1, 2026. If the employee gets a 4% average DA hike every year and the annual increment rate increases from 3% to 7%, their estimated gross salary (basic pay+DA) as of January 1, 2033, will be approximately Rs 77,694, a 106% increase from the revised basic pay of Rs 37,800.

Also Read: 8th Pay Commission pension calculator: Can Level 7 employees get up to Rs 58,000 minimum basic pension after retirement?

The DA rate at that time would be approximately 28%. If the DA is merged at that stage, the employee’s basic salary will be approximately. This means that in seven years, the basic salary will double.

Basic pay	₹ 18,000
Revised basic pay at 2.1 fitment factor	₹ 37,800
Annual increment rate	7%
Annual DA hike	4%

Date	Basic Pay (₹)	DA Rate	DA Amount (₹)	Gross Salary (₹)	Gross Salary increase
01-Jan-26	37800	0%	0	37800
01-Jan-27	40446	4%	1618	42064	11%
01-Jan-28	43277	8%	3462	46739	24%
01-Jan-29	46307	12%	5557	51863	37%
01-Jan-30	49548	16%	7928	57476	52%
01-Jan-31	53016	20%	10603	63620	68%
01-Jan-32	56728	24%	13615	70342	86%
01-Jan-33	60699	28%	16996	77694	106%

Source: AINPSEF

How basic pay of Level 6 employee may double in 7 years after DA merger

Now take the example of a Level 6 central government employee who gets the basic pay of Rs 37,800 under the 7th Pay Commission and see the estimated salary progression in 7 years into the 8th Pay Commission.

Basic pay	₹ 35,400
Revised basic pay at 2.1 fitment factor	₹ 74,340
Annual increment rate	7%
Annual DA hike	4%

Date	Basic Pay (₹)	DA Rate	DA Amount (₹)	Gross Salary (₹)	Gross Salary increase
01-Jan-26	74340	0%	0	74340
01-Jan-27	79544	4%	3182	82726	11%
01-Jan-28	85112	8%	6809	91921	24%
01-Jan-29	91070	12%	10928	101998	37%
01-Jan-30	97445	16%	15591	113036	52%
01-Jan-31	104266	20%	20853	125119	68%
01-Jan-32	111564	24%	26775	138340	86%
01-Jan-33	119374	28%	33425	152798	106%

Here also, you can see that at an average 4% annual DA increase, an annual increment rate of 7% and a fitment factor of 2.1, a Level 6 employee’s estimated basic pay after the DA merger on January 1, 2033, will be Rs 1,52,798, which is more than two times of Rs 74,340.

However, these are estimates, and the real basic and gross salary increases will be known only after the government approves the 8th Pay Commission report.