Earlier this year, before the onset of the festive season of Diwali, the central government announced a 3 percent hike in the dearness allowance (DA) given to central employees, thereby increasing their DA from 50 percent to 53 percent. Though this has benefited the employees, a fresh query has arisen as to whether the dearness allowance will now be included in the basic salary.
In case this occurs, there could be a significant overhaul in the structure of salaries of the employees. This matter has been addressed previously, and it is now being discussed once more. Dearness allowance (DA), is in fact, the component which Indian Government offers to alleviate the effect of soaring inflation amongst a segment of employees.
This allowance comprises of a specific proportion calculated on the basic salary of the concerned employee. Including it in the basic pay will not only increase employee income, but it will also impact the employees’ pension and other benefits. This is a proposal that is likely to raise the overall wages for the workers thereby enhancing their standard of living.
Announcement of increase in dearness allowance
On October 16, the dearness allowance (DA) of central employees was affected by another 3 percent increase from the government and therefore it stands at 53 percent from 50 percent. This increase is a matter of relief for the employees, especially when inflation is constantly increasing. This decision will also help the employees to some extent as it will raise their salaries owing to the rising inflation.
While pondering whether dearness allowance should be fused with basic salary, Union Minister Ashwini Vaishnav recently observed that it is being looked into but a conclusive decision has not been made. Inclusion of dearness allowance in basic salary will mean that there will be modification in the salary of the government workers for good. Besides, this modification shall also
There has been modification in the 6th Pay Commission
In fact, even at the implementation of the Sixth Pay Commission when the dearness allowance surpassed fifty per cent, this factor was taken into account too. In the year of 2004, the same dearness allowance approaching fifty percent mark was consolidated with the basic pay again but after word adjustment, rules were provided and it got separated once again.
If this is done in the 7th Pay Commission as well, then the salary structure of all the employees will be permanently modified and they will draw enhanced salary as per the dearness allowance. Furthermore, the allowances, the bonus and the pension for instance which are all predetermined on the basic pay will also be affected.