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Tuesday, February 25, 2014

Impact of Merger of 50% DA in Basic Pay

Impact of Merger of 50% DA in Basic Pay already first published by us on 2 years before i.e. Dec, 16 2012.  This probable post was as per 5th CPC DA Merger.  Some website & blog are showing less benefit in DA merger.  The contents published by[] is reproduced below:-

Everybody thinking as more benefit on 50% of DA merge with basic pay...not like that..!

It is essential to CG Employees, of course for others, getting from some other way in hike in regular income...

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%
Basic Pay
Dearness Pay
Remaining percentage of DA 1%









"Note that the 50% of Dearness allowance will not merged with basic pay, instead of the amount showing only as 'Dearness Pay'. This amount will pay upto only 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%. Don't think all Central Govt 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 TA 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...!

The above expectation is the matter of discussion on following facts:

Dearness Allowance:  The rate of Dearness allowance taken in above example is 51% but this time rate of DA is 90% and already calculated to increased to be 100%.  In view of this table shown above will be from 1st April, 2014 as shown below:- 
Basic Pay
Dearness allowance 51%
Basic Pay
Dearness Pay
Remaining percentage of DA 50%









The logic of 1% benefit shown in is not wrong but it was the benefit as on as on 1.1.2011 now DA is 100% and Govt is to be announce the 100% from the 1st Jan 2014 with retrospective date hence counting of benefit from the date 1.1.2011 is not feasible.  But what is correct? We should wait for govt. announcement.  

Interim Relief: As per Interim Relief previously given by Govt was a fix amount not based on any calculation and also was recoverable in Pay Commission arrears.  At this time grant of Interim Relief as per 1% of Basic Pay is also not looking comfortable for CG Employees.  Think about low paid salaried employees who are falling in GP 1800.  Then what will be given as Interim Relief? We should wait for govt. announcement.  

Basic Pay:  In 5th CPC only Basic Pay was the part of Pay Scale but in 6th CPC the Basic Pay is the combination of Pay in Pay Band and Grade Pay.  

HRA: In 5th CPC Basic Pay and Dearness Pay was the part of calculation of HRA.  After merger of DA in 6th CPC HRA should be as 5th CPC.  Because HRA is not increasing at the rate of 25% as like other allowances.  So logic of merger of DA benefit would not be effected on HRA is also not practicable.   But what is correct? We should wait for govt. announcement.  

At the end all news items are confirming that the merger of dearness allowance is the part of 7th CPC terms of reference there are many questions arising: 
1.  Is the benefit of merger of DA is the part of 7th CPC?
2.  Will the DR for Pensioner merged or not?

The answer of all questions will be answered by the govt notification.  Hope in this week there will be any good news from Govt side.

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7th CPC Report

Full Report || Allowances  || Pay Structure (Civil)  || Pay Structure (Military)  || Pension (Civil)  || Pension (Defence)  || Advances  || Leave  || NPS
1. Foreword View
2. The Macroeconomic Situation
2.1 General Economic Situation and Financial Resources of the Central Government
2.2 Financial Resources of the State Governments
3. Analysis of Central Government Personnel View
4. Approach to Pay
4.1 Principles of Pay Determination View
4.2 Determination of Minimum Pay View
5. Revised Pay Structure
5.1 Pay Structure (Civilian Employees) View
5.2 Pay Structure (Defence Forces Personnel) View
6. Pay Related Issues of Defence Forces Personnel
6.1 Background and Approach to Pay Related Issues of Defence Personnel
6.2 Cadres of Defence Forces Personnel
7. Pay Scales for Specific Services, Categories & Cadres
7.1 Headquarters Organisations in Government of India and Office Staff in Field Offices View
7.2 All India Services
7.3 Central Services Group A
7.4 Engineering Services
7.5 Scientific Services
7.6 Medical and Paramedical Services
7.7 Common Categories
8. Allowances View
8.1 List of Allowances (Summary) View
8.2 Overview of Allowances View
8.3 Allowances Payable for Additional/ Extra Duty View
8.4 Allowances related to Knowledge Updates View
8.5 Allowances related to Deputation View
8.6 Allowances related to Working on Holidays View
8.7 Allowances related to Housing View
8.8 Allowances related to Good Service View
8.9 Qualification Allowances View
8.10 Allowances related to Risk and Hardship View
8.11 Allowances for Running Staff of Indian Railways View
8.12 Allowances related to Sports View
8.13 Sumptuary Allowances View
8.14 Allowances related to Training View
8.15 Allowances related to Travel View
8.16 Allowances related to Uniform View
8.17 Other Allowances View
9. Other Facilities
9.1 Advances View
9.2 Holidays and Leave View
9.3 CGEGIS View
9.4 GPF View
9.5 Medical Facilities for Serving Employees and Pensioners View
9.6 Persons with Disabilities View
10. Pension and Related Benefits
10.1 Pension and Related Benefits of Civilian Employees View
10.2 Pension and Related Benefits of Defence Forces Personnel View
10.3 National Pension System (NPS) View
11. Issues Specific to Ministries and Departments
12. Officers and Employees of the Supreme Court of India
13. Regulatory Bodies
14. Training
15. Bonus Schemes and Performance Related Pay View
16. Financial Implications View
17. Executive Summary View
18. Meetings held by the Commission
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