50% DA Merger with Basic Pay from 01.01.2026: FNPO Writes to 8th CPC Seeking Immediate Interim Relief

In a significant development ahead of the 8th Central Pay Commission recommendations, the Federation of National Postal Organisations (FNPO) has formally urged the 8th CPC to recommend the merger of 50% Dearness Allowance (DA) with Basic Pay for Central Government employees and pensioners.

The letter, dated 27.02.2026, has been addressed to the Chairperson of the 8th Central Pay Commission, requesting that the DA merger be treated as an interim relief measure with effect from 01.01.2026 FNPO Letter DA merger.

This demand, if accepted, could have a substantial financial impact on lakhs of employees and pensioners across the country.

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What Exactly Has FNPO Demanded?

According to the official communication (Page 1 of the letter) FNPO Letter DA merger, FNPO has requested:

• Merger of 50% Dearness Allowance with Basic Pay
• Implementation from 01.01.2026
• Treating the merger as an Interim Relief pending final 8th CPC recommendations

The Federation has emphasized that rising inflation and erosion of real wages justify this structural correction in pay.

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Why Is 50% DA Merger Being Demanded?

The demand is rooted in four major justifications mentioned in the letter.

1. Erosion of Real Wages

DA is linked to the All India Consumer Price Index (AICPI) and is intended to neutralize inflation. However, sustained inflation over recent years has significantly reduced purchasing power.

The letter highlights that:

• Essential commodities have seen steady price rise
• Housing and rentals have become costlier
• Healthcare and education expenses have increased
• Fuel and transportation costs are rising

(Page 2 references the rising cost of food, housing, education, healthcare, fuel and transport) FNPO Letter DA merger.

FNPO argues that the existing Basic Pay structure no longer reflects the true cost of living.

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2. Historical Precedent in Earlier Pay Commissions

The letter states that whenever DA crossed 50% in earlier Pay Commission regimes, a portion of DA was merged with Basic Pay to provide structural correction in salary FNPO Letter DA merger.

Such mergers ensure:

• Future DA calculations are done on a realistic base
• Long-term correction in pay structure
• Better protection against inflation

This is not a new concept but a continuation of established practice.

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3. Impact on Allowances and Retirement Benefits

One of the strongest arguments made by FNPO relates to allowances and pension benefits.

Since several allowances and retirement benefits are calculated on Basic Pay, non-merger of DA results in stagnation in actual financial improvement.

The letter specifically states that merger of 50% DA would:

• Enhance House Rent Allowance (HRA)
• Increase Transport Allowance
• Improve pension and gratuity
• Strengthen long-term financial stability for employees and pensioners

(Page 2 bullet points) FNPO Letter DA merger.

This makes the DA merger not just a salary issue, but a long-term pension security matter.

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4. Interim Relief Pending 8th CPC Final Report

FNPO has highlighted that implementation of 8th CPC recommendations may take considerable time FNPO Letter DA merger.

Given ongoing inflationary pressures, the Federation has requested:

Treat 50% DA merger as an Interim Relief measure, subject to final adjustment based on 8th CPC recommendations.

This proposal aims to provide immediate financial cushioning while awaiting structural reforms under the 8th CPC.

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Why 01.01.2026 as the Effective Date?

The letter clearly requests that the merger be implemented from 01 January 2026 FNPO Letter DA merger.

This aligns with:

• The commencement timeline of the 8th Central Pay Commission cycle
• The need for immediate correction at the beginning of the new pay revision era

If approved, the financial implications would be effective from this date.

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What Could Be the Financial Impact?

If 50% DA is merged with Basic Pay:

• Basic Pay will increase substantially
• HRA and other pay-linked allowances will rise
• Pension calculations will improve
• Gratuity ceiling benefits may expand
• Future DA calculations will be on a higher base

For lakhs of Central Government employees and pensioners, this could mean significant monthly and long-term benefits.

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Is This a Final Decision?

No.

This is a formal representation submitted to the 8th CPC by FNPO FNPO Letter DA merger. The final decision rests with:

1. The 8th Central Pay Commission
2. The Central Government

As of now, it is a proposal under consideration.

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Why This Development Matters

The demand comes at a time when:

• Inflation continues to impact salaried households
• Middle-class employees are facing rising living costs
• Pay revision discussions under 8th CPC are gaining momentum

The DA merger debate could become one of the most significant financial issues under the 8th CPC framework.

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Conclusion

The Federation of National Postal Organisations has strongly urged the 8th CPC to recommend:

✔ Merger of 50% DA with Basic Pay
✔ Implementation from 01.01.2026
✔ Treating it as Interim Relief

View FNPO Letter: