The 8th Pay Commission is truly one of the hottest issues fired up among the employees of the government, determining future salaries, dearness allowance (DA), and a lot more perks. Whether the DA will be brought down to zero under this proposed scheme is one of those burning questions doing the rounds. Let’s dive into the rest of the details and understand the possibilities.
What is the 8th Pay Commission?
The central government is expected to set up the 8th Pay Commission, which is destined to review the salaries, allowances, and pensions of government employees and pensioners. Normally, a pay commission is established every 10 years, with the application of the 7th Pay Commission in 2016. If this cycle continues, the 8th Pay Commission is likely to be announced in 2024–2025 and implemented in 2026.
Will DA Be Reduced to Zero Under the 8th Pay Commission?
- Understanding the DA Component
Dearness Allowance (DA) is granted to government employees to make good for the increase in prices. It is computed as a percentage of the basic salary and revised twice in a year based on the inflation rate in January and July.
- Why Is There Talk About Resetting DA?
As per some reports, under the 8th Pay Commission, the DA would possibly merge with the basic salary leaving the DA amount zero. This does not mean that employees would be deprived of the money, however. The fresh pay scale would ensure that the newly incorporated DA amount was added to current salaries, continuing to pay adjustment salaries with inflationary adjustments.
Salary Impact: What Happens If DA is Merged?
Merging DA with the basic salary has certain major implications. The basic pay would be significantly higher, because it would entail all the DA percentage amounts currently applicable. Apart from these, with an increase in basic salary, PF contributions will increase, which benefits employees in the long run. Because gratuity is based on basic pay, also, it would be any higher.
The merger has its disadvantages as well. Higher basic salaries might lead employees into higher tax brackets, resulting in increased taxable income. Also, if the DA is merged, there may not be separate awards two times in a year for benefits, which would mean more structured adjustments under the new pay commission.
Government Stance On 8th Pay Commission And Merger Of DA
The government is tight-lipped about creating the 8th Pay Commission, but from history, it looks like a follow-up to the 6th Pay Commission, during which the DA got merged with the basic pay. Employee unions and associations closely follow the updates and advocate for just recruitment.
Conclusion: What Is Expected for Employees?
The 8th Pay Commission is supposed to meet again by 2026, with a new salary structure. It may, therefore not mean loss for employees if merged into basic salary since it will be added on to their entire salary structure. Government employees should wait for the latest updates and prepare themselves for any change in their salary and benefits, if any.
The final judgment is reserved for the government. Until an official notification is issued, all remains simply conjectural. However, history shows that while the structure of DA may change, salaries will continue to be adjusted to equal inflation.