Business Desk, New Delhi: The Narendra Modi-led central government recently announced a 3% increase in the Dearness Allowance (DA) for central employees, raising it from 50% to 53%. Following this, discussions have intensified about whether this increased DA will be merged into employees’ basic salaries before any revision in January 2025. Here’s the latest update on the matter.
Speculation About Merging DA with Basic Salary
The central government recently gave a significant boost to central employees by increasing their DA from 50% to 53%, effective from July 1, 2024. This led to growing discussions about whether this increased DA might be merged into the basic salary of employees. There have been speculations on whether the Dearness Allowance (DA) and Dearness Relief (DR) could automatically be added to the basic salary.
Government’s Stand: DA Will Not Be Merged with Basic Salary
According to a report in Business Today, the government has clarified that it will not merge the Dearness Allowance with the basic salary, even though the DA has crossed the 50% threshold. A senior official stated that during the 5th Pay Commission, there was a recommendation to merge the DA with the basic salary if it exceeded 50%. However, this was never implemented in the subsequent pay commissions.
What Do Experts Say?
Several experts have dismissed the possibility of merging DA with the basic salary. According to Vishal Gehrana, Principal Associate at Karanjawala & Company and Supreme Court Advocate on Record, the recommendation to merge DA with basic salary was made during the 5th Pay Commission as part of efforts to simplify the salary structure. However, this was not included in the 6th or 7th Pay Commission reports.
Other experts, such as Debjani H, Partner at IndusLaw, referred to these discussions as mere speculation, affirming that the increased DA will not be added to the central government employees’ basic salary. Sanjeev Kumar, Partner at Luthra & Luthra Law Offices, India, also noted that the 7th Pay Commission did not suggest any such measure.
When Will the Next DA Hike Take Place?
The central government revises DA and DR for employees and pensioners twice a year, typically in March and September/October, with these revisions becoming effective in January and July, respectively. Central employees receive their salaries along with arrears for the previous two to three months during these revisions. The next DA hike is expected to be announced before the Holi festival in March 2025.