The 8th Central Pay Commission (CPC) has officially begun work, and its recommendations are expected to reshape salary and pension structures for millions of central government employees and pensioners in India. The commission’s mandate includes reviewing pay scales, allowances, pensions and other benefits.
One of the major talking points in recent weeks has been whether the Dearness Allowance (DA) — projected to reach around 60 % in January 2026 — might become the base for calculating new salaries under the 8th Pay Commission.
📈 What Is Dearness Allowance and Why 60 % Matters?
Dearness Allowance (DA) is a cost‑of‑living adjustment paid to government employees and pensioners to offset inflation. It is calculated based on the All‑India Consumer Price Index for Industrial workers (AICPI‑IW) and is revised twice a year (January and July).
At present, DA is expected to cross 60 % effective 1 January 2026 (based on index data for December 2025), pending formal approval from the Union Cabinet.
The reason this figure is significant isn’t just that it reflects rising inflation — it could also play a role in how the fitment factor for the 8th Pay Commission is determined (see below).
🔍 How Salary Revisions Are Normally Calculated
When a new Pay Commission is implemented, it typically works like this:
Basic Pay – The core salary figure.
Dearness Allowance (DA) – Added to basic pay to counter inflation.
Fitment Factor – A multiplier applied to basic pay (and sometimes DA) to arrive at a revised basic salary under the new Pay Commission.
Under the 7th Pay Commission, the basic pay and DA figures at the time of implementation (January 1, 2016) were used to calculate a fitment factor of 2.57. This meant that the basic pay was increased roughly 2.57 times when the new salary structure was introduced.
📌 Will 60 % DA Become the Base for 8th CPC Fitment Factor?
There is no official confirmation yet on the methodology the 8th Pay Commission will use to revise salaries. However, if the commission uses a similar approach to the 7th CPC, then the DA rate at the time of implementation could be used as a base when determining the fitment factor.
Here’s the logic behind this:
- The 7th CPC assumed a DA of 125 % for its implementation base (even though actual DA at that point was 125 % on all‑India CPI). The fitment factor was built around this assumption.
- If the 8th CPC repeats this formula with 60 % DA as the current figure, then this 60 % could effectively create a minimum fitment factor of around 1.60. This means the new pay scales might not be less than 1.60 times the existing base basic + DA figure.
📊 In simple terms:
If the commission uses DA as a base like before, then a DA of ~60 % (which means basic plus DA is 1.60 of the base), could set the starting point for new salary calculations.
❗ Important Caveats: No Official Decision Yet
Despite this speculation:
- The government has clarified that there is no current proposal to merge existing DA or Dearness Relief (DR) with basic pay before the 8th Pay Commission recommendations are finalized.
- Whether the 8th CPC will adopt the same methodology as the 7th CPC — including using DA as part of the base — is still uncertain.
This means the actual fitment factor and how salaries will be revised are still under review by the commission.
🧠 What This Means for Employees and Pensioners
1. Fitment Factor Could Be Influenced by DA
If DA forms part of the base, a minimum fitment factor of around 1.60 might be a starting point. It doesn’t mean this will be the final multiplier — it’s simply a minimum based on the current DA level.
2. Actual Salaries Might Rise More Than This Base
Experts suggest that as DA continues to rise over time, the eventual fitment factor could be higher (e.g., 1.72–1.92 or more), especially if multiple DA hikes occur before the 8th CPC report is released.
3. DA Reset After Implementation
Traditionally, when a new Pay Commission’s recommendations are implemented, the Dearness Allowance is reset to zero and recalculated afresh. This could mean existing DA percentages do not remain permanent after 8th CPC implementation.
📅 Timeline and What’s Next
- The 8th Pay Commission has started work, with the official website launched and stakeholder feedback invited.
- The commission typically takes 18–24 months to complete its recommendations after being constituted.
- Salaries and pensions under the new structure are expected to be effective from January 1, 2026, but actual implementation may take time.
📝 Conclusion
While the 60 % Dearness Allowance expected from January 2026 is a key reference point, it is not yet confirmed whether it will become the base for salary computations under the 8th Pay Commission. If the commission continues the existing method used in the 7th CPC, DA could influence the fitment factor, potentially setting a base multiplier around 1.60. However, the final decision on methodology, fitment factor and salary revision will only be known once the 8th Pay Commission submits its recommendations and the government approves them.
Disclaimer:
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