By Admin 
- Finance Ministry refused to merge DA with basic pay.
- The current DA revision system will continue, changes expected from the 8th Pay Commission.
- Employees want increase in salary, allowances and pension from DA merger.
DA Merger News: The Union Finance Ministry has clearly said that no proposal to merge Dearness Allowance (DA) with Basic Pay is currently under consideration. Minister of State for Finance Pankaj Chaudhary has made it clear in the Parliament in its official statements that to deal with price rise and inflation, the existing DA amendment system will remain in force. At present, there are no preparations for any separate merger.
The government has notified the ‘Terms of Reference’ (ToR) for the 8th Pay Commission. At present, the Commission is holding discussions with tax employee organizations and unions in different states and suggestions are being taken from them. Now any major change in the salary structure will be seen directly in the Eighth Pay Commission.
How much is DA now?
Let us tell you that Dearness Allowance (DA) is a part of the basic salary, which is given to central government employees, public sector employees, defense personnel, bank employees and retired pensioners to reduce the impact of rising inflation. The All-India Consumer Price Index (AICPI), decided under the 7th Central Pay Commission, is changed twice a year – in January and July.
Usually it is announced only in March and October. DA has been increased by 2% in January this year, making it 60% of the basic salary for central government employees and pensioners.
Why are there demands to merge it?
All the allowances received by central government employees are decided on the basis of percentage of basic salary. If 50% or 60% DA is merged with the basic pay, it will increase the take home salary and if the basic pay increases, the allowances will also automatically increase. These include allowances like House Rent Allowance, Children Education Allowance, Transport Allowance, Hostel Subsidy.
Merging DA with basic pay will also affect gratuity because the calculation of gratuity and leave encashment of employees is decided on the basis of basic pay and dearness allowance. In such a situation, due to DA merger, the retiring employees will get benefit of lakhs in terms of PF, pension and gratuity. The 5th Pay Commission had recommended that if dearness allowance crosses the 50% level, it should be immediately merged into the basic pay so that the purchasing power of the employees is maintained. Now that dearness allowance has crossed 60%, the employees are demanding that the government implement the old and equitable system for interim relief.
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