8th Pay Commission: The government may soon increase the dearness allowance (DA) for central employees and pensioners from 55% to 58%. This will benefit around 1.2 crore people. On an average pension of ₹9,000, there will be a monthly increase of ₹270, which will provide significant additional relief annually.
8th Pay Commission: The DA increase will provide immediate relief and additional funds for festive expenses. At the same time, the 8th Pay Commission recommendations will provide lasting financial benefits in the long term. This is a dual-benefit opportunity for central government employees and pensioners.
First, the immediate benefit from the DA increase and second, the long-term benefit from the 8th Pay Commission recommendations. This Diwali is going to be special for central government employees and pensioners. The Modi government is preparing to take two major decisions that could directly improve the salaries and pensions of employees and pensioners.
Dearness Allowance (DA) Increase
Dearness Allowance (DA) is provided by the government to protect employees from inflation and is revised every six months. In March 2025, DA was increased from 53% to 55%. Now, according to media reports, it is likely to be increased to 58%, benefiting approximately 12 million central government employees and pensioners.
For example, if someone’s pension is ₹9,000, with 55% DA, it would be ₹4,950, while at 58% DA, it would increase to ₹5,220, resulting in a monthly increase of ₹270. While this amount may seem small on a monthly basis, over the course of the year, it would provide a significant additional income for employees and pensioners, including for festive expenses.
Good news may come before Diwali
The government announced the formation of the 8th Pay Commission on January 16, 2025. According to sources, the Commission’s Terms of Reference (ToR) may be finalized before Diwali, and the official constitution of the Commission will be approved soon. The Commission is likely to consist of approximately six members, who will review and recommend salaries, allowances, and pensions for the coming year.
Typically, the Pay Commission submits its report in 15-18 months. The government plans to complete it in just 8 months. If everything goes as planned, the new salary and pension structure could be implemented from January 1, 2026.
Direct Impact on Employees and Pensioners
The increase in DA will provide immediate relief and additional funds for festive expenses. The recommendations of the 8th Pay Commission will also provide lasting financial benefits in the long term. Thus, this is a dual benefit for central employees and pensioners: first, the immediate benefit from the DA increase and second, the long-term benefits from the 8th Pay Commission’s recommendations.
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