Now a recent push to increase the Dearness Allowance (DA) for central government employees from 50% to 53%, or a 3% raise if expressed in numbers, has led people to debate how this may change their pay scale. This allowance increment that was made for Diwali helps to combat increasing inflation levels that exist and there has been the challenges on whether this DA should now combine with the basic salary. As a glance at the above information here are the implications.
What the DA Increase Means for Employees
The DA incrementstarting from the October 16has immediately improved central employee’s take-home pay which could counter balance inflation. This 53% DA is appreciated when the employees try to deal with rise in the costs and if the government goes for merging this with the basic salary then there would be some future effects on the salary structure allowances and pensions.
Possible Effects of Aligning DA with the basic Salary
If the basic pay is added to the DAthen the employees will for sure feel a shift in their income permanently. This merger would enhance the basic salary structure which is the core for determining other aspects such as allowances, pensions, and bonuses. As a resultthey would not only get a higher amount of monthly pay but will also observe an increase in the other parts provided that their fundamental salary was already adjusted.
New Amendment in 6th Pay Commission
It is not unprecedented to add DA to the basic salary of employees. Within the budget exercise of the 6th Pay Commission, the DA was taken at 50 per cent for the first time in 2004 and got added to the basic pay to improve overall remunerational package of the employees. Again, the government later removed DA from the basic Salary once more. If the current discussions end up with delivering that below 7th Pay Commission it would be another significant change in central employees pay.
Union Minister for Railways Ashwini Vaishnav said recently about the merger of DA with the basic pay, it is still under consideration and has not been finalized yet. Were this to happen, it would have the effect of a more substantive overall salary for the employees, being more indexed, and offering superior long term advantage.