NEW DELHI: 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.
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