Central employees received a big gift after Diwali, as it was decided to increase their dearness allowance (DA) by 3 percent. The government raised both DA and DR by 3 percent, bringing it from 50 to 53 percent. With this increase, discussions have started on whether DA will now be merged with the basic salary. If this happens, significant changes will be seen in the salaries of government employees.
Will Dearness Allowance Be Merged with Basic Salary?
On October 16, the dearness allowance (DA) for central employees was increased by 3 per cent, raising it from 50 percent to 53 percent. This increase sparked discussions about adding DA to the basic salary. This isn’t the first time; during the Sixth Pay Commission, it was also recommended to merge DA with the basic salary once it crossed 50 percent.
Union Minister Ashwini Vaishnav recently stated that while discussions are ongoing, no decision has been made. In both the Fifth and Sixth Pay Commissions, similar suggestions were made to combine DA with the basic salary, creating a ‘dearness salary.’ Based on this, 50 percent of DA was merged into the basic salary in 2004, although the rules were later changed.
Potential Impacts on Salary and Allowances
If the government does decide to merge DA with the basic salary, central employees can expect a more stable salary structure that will lead to long-term financial gains. The increase in basic pay would not only impact the gross salary but could also elevate other benefits such as house rent allowance, travel allowances, and retirement benefits, which are often calculated as percentages of the basic salary. However, the exact nature of these benefits would depend on the final decision and the government’s policy direction.
As a result, central employees are enjoying a DA rate of 53 percent, but whether this allowance will be permanently added to their basic salary remains undecided. The government is reportedly brainstorming on this potential merger, assessing both the economic impact and feasibility. While employees wait for clarity, the possible change holds the promise of a considerable shift in their salary structure, marking yet another evolution in government compensation. For now, central employees will have to wait for further announcements, as the government carefully considers its next steps on the matter.