8th Pay Commission: FY28 Fiscal Test, DA Merger Tabled

8th Pay Commission: DA Merger Tabled Until Report; FY28 Labeled Major Fiscal Test

While the government confirmed that pension revision will be part of the 8th Pay Commission’s recommendations (a big relief for 69 lakh pensioners), the Finance Ministry also made it clear that the demand for merging the Dearness Allowance (DA) and Dearness Relief (DR) with basic pay is off the table for now.

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The DA/DR Status and Timeline

• No Current Plan: There is no proposal under consideration for the DA/DR merger currently.

• Future Consideration: The thing is, any such decision will only be considered after the 8th Pay Commission submits its full report.

• DA Hike Expectation: Meanwhile, the DA itself is expected to cross the 50 per cent mark by mid-2026.

The Fiscal Turning Point

The entire process, which is set to benefit approximately 50 lakh central government employees and 69 lakh pensioners, sets up a challenging balancing act for the country’s economy.

• Implementation Date: The commission is expected to submit its report in 2027, meaning the new pay structure may only start from 2028.

• Expert View: Experts are already noting the significant economic implications. As Neelkanth Mishra pointed out, the implementation will be a major test of financial management, making “FY28 an important fiscal turning point for India.”

The costs associated with the new pay structure, once implemented, will definitely test the government’s ability to manage its finances without compromising other priorities…..

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Disclaimer: This information is based on official government statements regarding the 8th Central Pay Commission and analysis from financial experts.

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