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8th Pay Commission: DA Increased to 63%, Will Fitment Factor Change?
Sentiment: NeutralHigh Priority
What Happened?
The Indian government has approved a 3% increase in the Dearness Allowance (DA) for central employees, raising it to 63% of their basic salary. This change, effective from July 1, 2026, will also affect the fitment factor calculations for the 8th Pay Commission.
Key points
- DA increase will benefit approximately 48.54 lakh central employees and 68.71 lakh pensioners.
- Employees will receive a four-month arrear from July to October 2026.
- The new DA will raise the monthly income of a Level-1 employee with a basic salary of ₹18,000 by ₹540.
- The total annual cost for the government due to this DA increase is estimated at ₹10,016.10 crore.
- The fitment factor will need to be adjusted to maintain real salary increases.
Key insights
- The adjustment in the fitment factor will determine the actual salary increase for employees.
- If the fitment factor is not increased adequately, employees may not see a significant real salary increase.
- The upcoming 8th Pay Commission report will further clarify the implications of this DA increase.
Why it matters
This increase in DA could significantly impact the financial well-being of central employees and pensioners.
Source
India Today
