There is no update about the formal formation of the 8th Pay Commission. It was expected that in May or June 2025, there will be any news about development in this direction, but now June has come to an end. Meanwhile, the Central Government employees are expecting another increase in dearness allowance and dearness relief under the 7th Pay Commission. However, it is believed that the increase may remain less this time. It may be within a radius of 2-3 percent.
The possible increase in DA and DA may come into force from 1 July. It may also be that the next increase, DA and DR under the 7th Pay Commission may have a last increase. The DA hike, which comes into force from July, mostly announces the government before Diwali.
DA has increased by 2 percent from January 1
Currently all central employees and pensioners are getting 55% DA. The Union Cabinet approved a 2 percent increase in dearness allowance and inflation relief under the 7th Pay Commission in March this year. It came into force from 1 January 2025. The central government has 48.66 lakh employees and 66.55 lakh pensioners. After the announcement for central government employees, many states also implemented an increase in DA and DR for their employees and pensioners. DA and DR are paid to monitor the cost of living, to provide relief to employees and pensioners from inflation.
Why is there a low increase in DA this time
Retail inflation in the country decreased to 6-year low of 2.82 percent in May this year, due to the reason for the prices of food and drink. Earlier, retail inflation was 2.57 percent in February 2019. The RBI draped the repo rate by 0.50 percent in the meeting of the Monetary Policy Committee for the month of June amid softening of inflation. Now the repo rate is 5.50 percent. The repo rate is the rate at which RBI gives loans to banks.
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Talking about wholesale inflation, the wholesale inflation has come down to 14 months in May amidst the softening of food items, manufactured products, and fuel prices. It was 0.85 percent in April and 2.74 percent in May 2024.
The possibility of implementation of recommendations of 8th Pay Commission from January 2026 decreased
It was expected that by April, the government would decide the terms of the context of the 8th Pay Commission and appoint the chairman and members and instruct the Commission to start the work. This is so that the panel can submit its report by mid -2026 and after that the process of amending the salary and pension of the central employees can be started. The commission’s recommendations were likely to be implemented from January 2026. Now June is also going to end and so far there is no progress regarding the 8th Pay Commission. In such a situation, the possibility of implementation of its recommendations from January 2026 has reduced. The 7th Pay Commission was formed in 2014 and its recommendations came into force from January 1, 2016. Its duration is ending in 2026.
