As of Monday, February 2, 2026, the Government of India has NOT issued any order to merge 50% Dearness Allowance (DA) with Basic Pay, despite the DA rate crossing the 50% threshold. This stance aligns with the 7th Pay Commission’s specific recommendation (Para 1.32) to discontinue the practice of treating DA as “Dearness Pay” which was prevalent in earlier commissions.
⚠️ Official Rule Position: While Basic Pay remains unchanged, the “Allowances” linked to DA (like HRA, Children Education Allowance, and Gratuity Ceiling) have already been automatically increased by 25% as per the Department of Expenditure’s standing orders.
Why 50% Merger is NOT Happening (7th CPC Rule)
The confusion stems from the 5th Pay Commission era (2004), where 50% DA was converted into “Dearness Pay,” effectively increasing the Basic Pay by 50%. However, the 7th Central Pay Commission (7th CPC) explicitly removed this provision to simplify the salary structure.
| Feature | 5th Pay Commission (Old Rule) | 7th Pay Commission (Current Rule) |
|---|---|---|
| DA > 50% | Merged with Basic Pay (Dearness Pay) | No Merger. Continues as DA (54%, 58%, 62%…) |
| Allowances | Increased only after Merger | Auto-Hike. Allowances rise by 25% automatically when DA crosses 50%. |
| Pension | Calculated on Basic + Dearness Pay | Calculated on Basic Pay only (DR paid separately) |
The Verdict: Unless the Cabinet approves a specific “One-Time Relaxation” or constitutes the 8th Pay Commission early, the DA will continue to accumulate separately.
Impact Calculation: What Are You “Losing”?
Employees often ask: “How much would my salary increase if the government accepted the merger demand?” The difference lies mainly in the future DA calculation base.
Example: Level 1 Employee (Basic Pay ₹18,000)
| Component | Current Scenario (No Merger) | Hypothetical Scenario (50% Merger) |
|---|---|---|
| Basic Pay | ₹18,000 | ₹27,000 (18k + 9k merged) |
| DA Rate | 62% (on ₹18k) | 12% (on ₹27k) [Reset] |
| DA Amount | ₹11,160 | ₹3,240 |
| Gross Pay | ₹29,160 | ₹30,240 |
Analysis: The immediate monthly difference is approximately ₹1,080. However, the bigger impact is on Retirement Benefits (Gratuity/Leave Encashment) which are calculated on the “Last Basic Pay”. Without a merger, retirees get slightly lower terminal benefits.
Which Allowances Increased After 50% DA?
Even without a merger, the following allowances were revised by 25% effective from Jan 1, 2024 (when DA hit 50%):
- House Rent Allowance (HRA): Revised to 30%, 20%, 10% (X, Y, Z Cities).
- Children Education Allowance (CEA): Increased to ₹2,812.50 per month.
- Hostel Subsidy: Increased to ₹8,437.50 per month.
- Gratuity Ceiling: Limit raised from ₹20 Lakh to ₹25 Lakh.
- Dress Allowance: Increased by 25% for eligible categories.
Did the Budget 2026 announce DA merger?
No. The Finance Minister did not mention any proposal to merge Dearness Allowance with Basic Pay in the 2026 Budget speech.
Is DA Merger automatic after 50%?
No. Under 7th CPC rules, only allowances (HRA, CEA, Hostel Subsidy, etc.) are indexed to increase by 25% automatically. Basic Pay merger requires a separate Cabinet approval.
हिंदी सारांश
2 फरवरी 2026 तक, सरकार ने 50% DA को बेसिक पे में मर्ज करने का कोई आदेश जारी नहीं किया है। 7वें वेतन आयोग की सिफारिशों के अनुसार, DA 50% पार करने पर केवल HRA और ग्रेच्युटी जैसे भत्ते (Allowances) 25% बढ़ते हैं, लेकिन बेसिक सैलरी नहीं बदलती। बजट 2026 में भी इसके विलय की कोई घोषणा नहीं की गई है।
