8th Pay Commission: Employee Unions Push for DA Merger, Minimum Pay Hike and Higher Fitment Factors

As the 8th Central Pay Commission (CPC) advances its formal consultations across the country, major central government employee unions and pensioner associations have submitted their primary demands, calling for a merger of Dearness Allowance (DA) into basic pay, significant revisions to minimum wages, and higher fitment factors.

The commission’s eventual recommendations will directly impact over one crore individuals, comprising approximately 50 lakh active central government employees and around 65 lakh pensioners, including civilian personnel, railways staff, and defence veterans.

DA Merger at the Center of Union Demands

A primary demand among employee federations is an official government declaration merging Dearness Allowance into basic salary. Under guidelines established during the 7th CPC, DA could be considered for merger once it exceeded the 50% mark. With the component having reached 60% of basic pay, unions argue that an adjustment is overdue.

Because basic pay serves as the benchmark calculation for pensions, provident fund contributions, gratuity, and several service allowances, merging DA into the base figure would trigger a comprehensive upward revision across total compensation packages. 8th Pay Commission: Will Central Government Employees Get Arrears From January 2026? Check Details.

Push for Higher Minimum Basic Pay

Representative bodies have also urged the panel to overhaul entry-level compensation to reflect current living costs. The National Council – Joint Consultative Machinery (NC-JCM) and the All India Defence Employees Federation (AIDEF) have recommended raising the minimum basic pay to INR 69,000 per month, while the Maharashtra Old Pension Organisation has sought a floor of INR 65,000. 8th Pay Commission Salary Hike: How Much Could Basic Pay Rise Under 2.57 Fitment Factor?

In the transport sector, the Indian Railways Technical Supervisors Association (IRTSA) proposed a revised minimum basic pay of INR 52,600, arguing that wage formulas must adapt to modern economic pressures. Concurrently, the Railways Senior Citizens Welfare Society (RSCWS) has urged that baseline revisions align with the price index as of January 1, 2026.

Fitment Factors and Revised Inflation Formulas

Alongside baseline pay revisions, employee groups are seeking adjustments to the fitment factor used to transition existing pay scales into the new matrix. The IRTSA suggested adopting higher indexed fitment factors - ranging from 2.92 to 3.80 - with particular emphasis on technical and safety posts within the Ministry of Railways.

Additionally, federations have raised concerns regarding the structure of the Dearness Allowance formula itself. In a supplementary memorandum to the panel, the AIDEF contended that the current calculation gives excessive weight to relatively stable spending indices. The federation argued that lower-income employees spend a disproportionate share of their earnings on essentials subject to high inflation, such as food, healthcare, rent, and education.

Timeline for Submission and Rollout

Constituted in November 2025, the 8th Pay Commission operates under Terms of Reference requiring it to deliver its final recommendations within 18 months, establishing a completion deadline of May 2027. The commission has continued holding regional stakeholder meetings, including a series of consultations in Mumbai scheduled for late October.

Once the panel submits its report, the recommendations will undergo review and clearance by the Union Cabinet. Past pay commission rollouts suggest that full implementation, including retroactive adjustments and structural realignment across ministries, may take two to three years following the report's release.

(The above story first appeared on LatestLY on Oct 17, 2026 09:19 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).