The method of calculating DA will change in the 8th Pay Commission! There will be a big impact on the salaries of employees.

8th Pay Commission Salary Structure Change: With the formation of the 8th Pay Commission for Central Government employees, the discussion regarding calculation of dearness allowance has intensified. Many major organizations including All India Trade Union Congress (AITUC) have demanded the government to change the existing DA formula, terming it outdated. Unions argue that the current approach does not accurately reflect the real situation of rising expenses and inflation today. The 8th Pay Commission has now extended the last date for giving suggestions to 31 March 2026, which has given new impetus to the discussion.

Status of current DA

Dearness Allowance is a very important part of the total salary of government employees and pensioners which is revised twice a year. The current DA rate applicable from July 2025 is 58 percent and it is expected to be 60 percent or more in January 2026. However, the unions say that the existing formula is now very outdated and inadequate in view of the pace at which inflation is increasing.

family size demand

The biggest demand of the employee organizations is that the family basis while calculating dearness allowance should be increased from 3 members to 5. The unions want that the expenses of the parents should also be included in this as they too are completely dependent on the employee’s income. Apart from this, there has been a demand to include expenses on today’s needs like internet, digital services and health in the calculations.

Controversy over Aykroyd formula

Currently the DA calculation is based on the old Aykroyd formula adopted in 1957 which only looks at basic needs like food and housing. Unions argue that this formula focuses only on survival needs and ignores modern living standards or urban expenses. Therefore, it is very important to change this old rule so that the salary and pension of the employees can be fixed according to their actual and growing needs.

Possible impact on salary

If the government accepts these demands of the unions and changes the DA formula, then there can be a big jump in the minimum salary of the employees. The minimum wage may increase from Rs 18,000 to Rs 30,000 or even more, which will provide direct economic benefits to lakhs of employees. Along with this, due to increase in fitment factor, the total salary is expected to increase by 50 to 60 percent.

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pressure on government treasury

This huge increase in salaries and pensions is likely to place a huge financial burden on the government’s annual budget and expenses. The cost of living varies in different cities, hence making a uniform formula for the entire country is a big challenge for the government. Now all eyes are on the final decision of the 8th Pay Commission which will decide whether the method of DA calculation will change in future or not.