Merger of DA with Basic Pay

Merger of 50% DA with Basic Pay to Govt Employee

Confederation General Secretary publishes the detailed note on the fifteen points demands, including the main point of ‘Merger of DA with Basic Pay’.

Item No. 2. Merger of DA with pay:

The wage revision of the Central Government employees had always been through the setting up of Pay Commissions. Since the wage revision exercise involves inquiring into various aspects of wage determination and service conditions of the Government employees the Government had been appointing Pay Commissions for it was considered a better suited system.

Such inquiry through setting up of Commissions had been a time consuming process. The 3rd, 4th and 5th Central Pay Commissions had taken more than three years to submit their reports.

The 6th CPC however, submitted its report in the time frame provided to it i.e. 18 months. Since the earlier Commissions had covered many aspects of the principles of wage determination and the periodicity of such revision had come down, the exercise might not now require a longer period of time as was the case earlier

Even then the Commission will have to be given a reasonable time frame to go into the matter judiciously for the 6th CPC recommendations when implemented has given rise to large number of anomalies and cadre reated grievances.

The methodology adopted for compensating the erosion in the real value of wages in the in the interregnum period had always been though the mechanism of merger of a portion of DA.

The 5th CPC had recommended that the DA must be merged with pay and treated as pay for computing all allowances as and when the percentage of Dearness compensation exceeds 50%. Accordingly even before the setting up of the 6th CPC the DA to the extent of 50% was merged with pay.

It is pertinent to mention that even this benefit was denied to the GDS. As on 1.1.201, the Dearness compensation was 65% The suggestion for merger of DA to partially compensate the erosion in the real wages was first mooted by the Gadgil Committee in the post 2nd Pay Commission period.

The 3rd CPC had recommended such merger when the Cost of Living index crossed over 272 points i.e. 72 points over and above the base index adopted for the pay revision.

In other words, the recommendation of the 3rd CPC was to merge the DA when it crossed 36%. The Government in the National Council JCM at the time of negotiation initially agreed to merge 60% DA and later the whole of the DA before the 4th CPC was set up.

The 5th CPC merged 98% of DA with pay. It is, therefore, necessary that the Government takes steps to merge atleast 50% of DA with pay to compensate the erosion of the real value of wages immediately.