The Federation of National Postal Organisations (FNPO) has formally urged the 8th Central Pay Commission (CPC) to recommend the merger of 50% Dearness Allowance (DA) with Basic Pay and to treat it as an interim relief measure effective from January 1, 2026.
In a detailed representation dated February 27, 2026, addressed to the Chairperson of the 8th CPC, Smt. Justice Ranjana Prakash Desai, FNPO Secretary General Sivaji Vasireddy highlighted the growing financial strain on Central Government employees and pensioners due to sustained inflation.
DA Rise Reflects Erosion of Real Wages
The federation noted that Dearness Allowance, which is linked to the All India Consumer Price Index (AICPI), has risen sharply in recent years due to persistent inflation affecting essential commodities, housing, healthcare, education, fuel, and transportation.
According to the FNPO, the steep increase in DA is a clear indicator that the current basic pay structure no longer reflects the actual cost of living. “Sustained inflation over the past several years has substantially reduced the purchasing power of employees,” the memorandum stated, adding that middle-class salaried employees are particularly affected.
Citing Precedent from Earlier Pay Commissions
The federation pointed out that historically, whenever DA crossed the 50% mark, a portion was merged with Basic Pay to neutralize inflation and provide structural correction in pay. Such a merger ensures that future DA calculations are based on a more realistic pay base, while also strengthening long-term financial stability.
FNPO argued that non-merger of DA results in stagnation in actual financial improvement, as several allowances and retirement benefits — including House Rent Allowance (HRA), Transport Allowance, pension, and gratuity — are calculated on Basic Pay.
Call for Interim Relief
Acknowledging that the 8th CPC’s recommendations and implementation may take considerable time, the federation requested that the merger of 50% DA with Basic Pay be considered as an interim relief measure, subject to final adjustment based on the Commission’s recommendations.
The memorandum emphasized that rising household expenditures — particularly on food, essential commodities, housing and rentals, education, healthcare, fuel, and transport — have significantly increased financial pressure on employees and pensioners.
Key Demands
The FNPO has requested the Commission to:
- Recommend merger of 50% DA with Basic Pay for all Central Government employees and pensioners.
- Treat the merger as interim relief pending finalization and implementation of the 8th CPC recommendations.
- Implement the measure with effect from January 1, 2026.
The federation stated that such a move would provide immediate financial relief, partially restore purchasing power, and ensure economic dignity for lakhs of employees and pensioners across the country.
An early positive decision on the matter would be “highly appreciated,” the representation concluded.
