50% DA MERGER - Impact of Merger of 50% Dearness Allowance with Basic Pay


50% DA MERGER - Impact of Merger of 50% Dearness Allowance with Basic Pay

Any possible to convert 50% of dearness allowance to dearness pay..!

Everyone's pointing fingers at "Parliament Election"...! 


50% of dearness allowance had been merged with basic pay for Central Government Employees and Pensioners with effect from 1.4.2004. This was followed the recommendation of 5th Central Pay Commission and the Union Government had decided to merge 50% of dearness allowance with baisc pay and issued orders on 1.3.2004.  (61% - 50% = 11%) 50% of dearness allowance merged with basic pay and remaining 11% had been issued as normal dearness allowance with effect from 1.1.2004.

Example : An employee's Basic Pay had revised as under on 1.1.2004 after 50 % DA merged with basic pay...

Basic Pay Dearness allowance 61% Total Basic Pay Dearness Pay Remaining percentage of Dearness allowance 11% Total Difference

4000

2440

6440

4000

2000

660

6660

220


[And the next instalment of additional dearness allowance from 1.7.2004 declared as 3%, then the total dearness allowance went up to 14%. When implementation of 6th CPC, the above employee's basic pay was 4200 as on 1.1.2006, it just multiply with 1.86 and add with corresponding grade pay.]

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% Total Basic Pay Dearness Pay Remaining percentage of DA 1% Total Difference

10,000

5100

15100

10000

5000

150

15150

50



"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...!

Source: CGEN.in
[http://centralgovernmentemployeesnews.in/50-da-merger/]

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Comments

Anonymous said…
I think NFIR was too quick to thank the Government on 21.02.2014 itself without waiting for actual announcement.
Anonymous said…
Yes, you are right to some extent but considering the present rate of DA% ie.90, employees would benefit with around 30% hike in salary. Are you against it ? Or you have a plan to suggest some better ideas apart from DA merger? Think and write using correct grammar too.
Asif said…
If the 50% DA with be merged with the basic then why the DA will start from 1 percent instead of remaining 50 %???
Only the 50% is merged with the basic pay as dearness pay but still then the DA will remain 40%
Anonymous said…
Mr.Asif, you are correct, but in India all CG Employees will get the same benefit as 30 to 35%...you have to say minimum 15% to maximum 30%. Media are boosting the news about the hike of all CG Employees...!
Anonymous said…
The above calculation starts with the percentage of 51% as o 1.1.2011...not indicate 1.1.2014.
Anonymous said…
If 50% da would be merged , then employee will get remaining 40% da and 30% hra ( or whatever applicable) on previous basic+50% of previous basic which will result in significant hike in salary.
Anonymous said…
Hello Sir,
For example, an employee getting 15000 BP, he is getting 90%DA+30%HRA=33000.

If 50% of DA merge with BP, his BP 22500+DA40%+30%HRA=38250.

You pl. calculate the hike of percentage in salary..!
D. Sankar said…
D.A. is calculated on BP+GP. So, 50% da merger is useful in two ways i) addl. 30% hra on 50% da & ii) balance da% on merged 50%da.
For Eg. (before da merger)
BP 10,000 GP 4,200 DA% is 90. Then, the Gross pay is (BP 10000 + GP 4200 + HRA 4260(30%)+ 12834) = 31294.
(after 50%da merger)
BP 10,000 + GP =4,200 + DP = 6417(50% of 12834) + HRA = 6185 + DA 8269 = 35049)
Therefore, diff = 35049-31294 = 3755. (12% increase on Gross pay).
M K Jha said…
Your understanding about HRA is not clear. Govt servant not paying HRA to govt quarter, but the govt paying HRA to govt employees in lieu of quarter. In the case of merger of DA during 2004 also, the HRA was admissible on the dearness pay. Please do not post such rumurous facts.
Anonymous said…
I agree that the hike will not be more than 15%. And post tax benefit will be some where between 10.5 to 13.5%.
Anonymous said…
what is the rest of the demand.
1. Item no. 8.3 regarding pay fixation of the promotees which should be the main demand for UNIONS. Because promotion is the main DRIVING FORCE for a organisation's rise.
Anonymous said…
100 PERCENT MERGER. EXPECTIND
Anonymous said…
@ mr shankar swamy : your calculation has error.
50% of does not mean 50% of 90% ie. 45 %(6417)
IT means 50% DA =50% of pay=7100
Unknown said…
when on wards this 50% merrger starts from which year onwards they calculate sir.will they give from this april

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