HomeDearness AllowanceGovt likely to increase and merge dearness allowance with basic pay

Govt likely to increase and merge dearness allowance with basic pay

The government may increase and merge dearness allowance (DA) with basic pay with the Union Cabinet expected to include the proposal as part of the terms of reference of the 7th pay commission.

The move will facilitate announcement of interim relief to more than 50 lakh government employees and 30 lakh pensioners by the newly-constituted pay commission before the code of conduct for the Lok Sabha polls come into force.

Central government employees unions have been demanding that besides raising DA to 100%, the government should revise the pay and merge DA with basic pay, considering market inflation and price hike of essential commodities.

As per practice, DA is merged with basic pay when it breaches the 50% mark. DA merger helps employees as their other allowances are paid as a proportion of basic pay.

An official said if merger of 50% DA with basic pay was decided, it could lead to hike in salary by around 30-35%. He added that there were instances of announcing interim relief to employees apart from DA by a newly constituted pay commission prior to their implementation.

Merger of 50% DA with basic pay was done in the 5th pay commission, but the 6th commission did not recommended it.

The Centre is expected to announce next month a hike in dearness allowance by 10% which would make it 100% of basic pay. It will be the second double digit DA hike in a row as the government had announced a hike of 10% in September last year, effective from July 1, 2013.

An official said hike in DA will not be less than 10% and would be effective from January 1 this year.

Source : The Times of India

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6 COMMENTS

  1. IT IS THE REQUEST OF THOUSANDS OF RETIRED CIV.DEFENCE EMPLOYEES THAT THE BENIFIT OF CSD FACILITIES TO BE EXTENDED TO THEM.WE HOPE THAT OUR NEW MODIJI GOVT. WILL DEFENITELY HELP THEM

  2. It will take atleast 16 months to merge 50% DA with the basic salary or to grant interim relief. Govt has made announcement only to build bank vote for the forthcoming parliament elections. The whole burden will be on the head of new Government.

  3. whether there will be merger order by the government or pay commission will be asked to give his recommendation on the merger issue, the later will be making fool to us.

  4. Tax exemption should be 300000/ for senior citizen instead of 250000/ amended in the forthcoming parliament session so that the pensioners of senior citizen may avail to run easy life in the high price scenerio in the market.By A.G.Swamy Retired D/C

  5. hello, I have two points to suggest one in connection with the 7th pay commission, i.e. the medical allowance given to pensioners must be increased and it should be minimum Rs.one thousand looking to the current costly medicines and medical treatment. [ii] There must be rise in relief in income tax in annual bank interest which is taxable if it croses Rs. 10000/- through TDS immediately It should be totally income tax exempted for senior citizens at least as they have to manage with their pension and from the intrest of their remaining savings in their old age. or otherwise the limit should be increase from
    Rs. 10000/- to 30000/- yearly. this will be the great relief to them. Hoping to hear soon from your end.

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