In the year 2004, 50% of dearness allowance was merged with basic pay for Central Government Employees and Pensioners with effect from 1.4.2004. This was implemented as per the recommendation of 5th Central Pay Commission and the Union Government had decided to merge 50% of dearness allowance with baisc pay and issued orders on 1.3.2004. The DA was 61% at that time. (61% – 50% = 11%) 50% of dearness allowance was merged with basic pay and the remaining 11% was issued as normal dearness allowance with effect from 1.1.2004.
Example : An employee’s Basic Pay had revised as under on 1.1.2004 after 50 % DA merged with basic pay…
| Basic Pay | Dearness allowance 61% | Total | Basic Pay | Dearness Pay | Remaining percentage of Dearness allowance 11% | Total | Difference |
| 4000 | 2440 | 6440 | 4000 | 2000 | 660 | 6660 | 220 |
[And the next instalment of additional dearness allowance from 1.7.2004 declared as 3%, then the total dearness allowance went up to 14%. When implementation of 6th CPC, the above employee's basic pay was 4200 as on 1.1.2006, it just multiply with 1.86 and add with corresponding grade pay.]
Everybody thinks that merger of 50% DA is more beneficial…. But it is not like that…….!
It is essential to CG Employees, of course for others also, a regular increase in the basic pay is needed………!
For Example, an employee’s basic pay Rs.10000 as on 1.1.2011, after merging of 50% dearness allowance the calculation is clearly shows the difference only 50 rupees per month…
| Basic Pay | Dearness allowance 51% | Total | Basic Pay | Dearness Pay | Remaining percentage of DA 1% | Total | Difference |
| 10,000 | 5100 | 15100 | 10000 | 5000 | 150 | 15150 | 150 |
“Note that the 50% of Dearness allowance will not be merged with basic pay, instead, the amount will be shown as ‘Dearness Pay’. This amount will be payable only upto the date of implementation of 7th pay Commission.
This is only as a advance hike for all employees before the implementation of 7th CPC.
When fixation of pay on the recommendations of 7th CPC on 1.1.2016 according to the revised pay rules, the amount of ‘basic pay’ will be taken without dearness pay.
For example, approximately basic pay of the above employee will be 12,250 as on 1.1.2016 . This amount only will be taken as Basic Pay for the calculation of pay fixation against the amount of 18,375.
The enhanced amount will be given for us as ‘Interim Relief’ for the period between announcement and implementation…It is not at all merged with ‘Basic Pay’..!
We can hear, what about hike in HRA and other entitlements…
The rate of HRA is provided according to the cities, like 10, 20 and 30%. Not all the employees are getting 30%. And one more important points is the percentage hike in HRA will not applicable to those who are living in Government Quarters. In major metropolitan cities, thousands of employees are residing with Government Accommodation. They will pay more as HRA to Government and they don’t bother about increasing in HRA.
Transport Allowance is providing according to their GP and classified cites, the amount is vary from 400 to 3200 plus DA thereon. The DA amount may decrease when 50% of DA merged with basic pay.
So, ultimately hike in Basic pay only the factor is more beneficial in DA Merger.
But in 6th CPC there was no recommendation to convert dearness allowance as dearness pay each time the CPI increase by 50% over the base index recommended in pay commission report.
All Central Government employees federations are showing maximum effort to achieve the demand of “Merger of 50% Dearness Allowance with Basic Pay” at this time.
Federations sources said, there will be chance to announce before March…!
Central government employees are awaiting next government nod on merger of 50 percent dearness allowance to basic Pay in the view of model code of conduct.
Family finances of government employees are being squeezed from all sides as inflation is rising at its fastest level in last four years. How can government employees cope with raising inflation besides merger of 50 percent dearness allowance (DA) to basic pay.
High prices of day-to-day goods make it difficult for government employees to afford even the basic commodities in their lives.
The Sixth Pay Commission did not talk about merger. As a result, with the continuous increase of dearness allowance, this has now reached up to 100 per cent of basic pay but the government did not merged 50 percent dearness allowance to basic pay on the pretext of sixth pay panel recommendation.
Earlier, the DA was merged with basic pay, only after it touched 50 per cent of the basic pay on the recommendation of fifth central pay panel.
The government has set up the Seventh Central Pay Commission to recommend for revising salaries of central government employees.
The 4-members commission, headed by Ashok Kumar Mathur, former Supreme Court Judge, will formulate pay, allowances and other facilities as well as benefits structure for 50 lakh central government employees.
The commission will also to look at the revision of pension for those who have retired prior to the date of effect of these recommendations.
However, the decision regarding merger of 50 per cent dearness allowance to basic pay will be taken only after the Seventh Pay Commission gives its interim recommendations under the terms of reference for the commission before submitting of its final report within 18 months of the date of its constitution.
The merger of 50 percent DA to basic pay will lead salaries rising by up to 30 per cent, which will cope with the present living cost of government employees.
The election Commission announced the Lok Sabha elections; model code of conduct makes the government lame-duck as it cannot take decision on merger of dearness allowance without permission of the Election Commission.
Hence, this genuine demand may be considered by the next government only on interim recommendation of seventh pay panel.
Source : http://tkbsen.in/2014/03/central-employees-awaiting-next-govt-nod-on-da-merger/
