DA Merger with Basic Pay - Ministry of Finance replies in the negative

DA Merger with Basic Pay – Ministry of Finance replies NC, JCM in the negative for Merger of Dearness Allowance with Basic Pay

With regard to representation of National Council (Staff Side), JCM for merger of Dearness Allowance with Basic Pay, Department of Expenditure, Ministry of Finance has replied that Sixth Central Pay Commission did not recommend merger of DA with basic pay at any stage and that the same was accepted by Government.

No.1(6)/2013-E-II(B)

Government of India

Ministry of Finance

Department of Expenditure

***

North Block, New Delhi

Dated 17th June, 2014

Shri Shiva Gopal Mishra,

Secretary,

National Council (Staff Side),

Joint Consultative Machinery for Central Government Employees,

13-C, Ferozshah Road,

New delhi-110 001

Subject : Merger of Dearness Allowance with Basic Pay – regarding
Sir,

This is in reference to letter No.NC-JCM/2014/DA/DP addressed to the Hon’ble Finance Minister regarding merger of Dearness Allowance (DA) with Basic Pay. It is stated that the Sixth Central Pay Commission did not recommend merger of DA with basic pay at any stage. This has been accepted by the Government vide Resolution dated 29.8.2008

Yours faithfully

sd/-

(A.Bhattacharya)

Under Secretary to the Government of India

Click here for Ministry’s reply dated 17.06.2014

Text of Letter dated 12.06.2014 of NC JCM addressed to Government

Shiva Gopal Mishra

Secretary

National Council (Staff Side)

Joint Consultative Machinery

for Central Government Employees

13-C, Ferozashah Road. New Delhi – 110001

No.NC/JCM/2014

Dated: June 12, 2014

The Cabinet Secretary
And
Chairman National CounciI(JCM),

Government of India, North Block, New Delhi

Resp. Sir,

Sub: Merger of DA with Pay and sanction of Interim Relief for the Central Government Employees.

I take this opportunity to bring to your kind notice that, while Government of India have appointed 7th Central Pay Commission for the Central Government Employees to make recommendations in regard to revision of wages and other allowances, merger of Dearness Allowance with Pay and payment of Interim Relief have neither been considered by the government itself nor included in the Terms of Reference(ToR) of the VII CPC.

It may be recalled that the two issues, viz. Merger of Dearness Allowance with Pay and Interim Relief have been the subject matter with the government at the time when the Staff Side was called upon to present their views while finalizing the ToR of the VII CPC by the Secretary(PersonneI, DoP&T), in his capacity as Chairman, Standing Committee, National CounciI(JCM). Although, the Staff Side pleaded for the specific reference of the above two issues to the VII CPC, the final version of the ToR, as approved by the government, did not find place for our views.

It would not be out of context to mention here that the methodology adopted for compensating the erosion in the real value of wage on account of price hike reflected in the rate of Dearness Allowance paid to Government Employees. The merger of DA to partially compensate the erosion in the real wages was done in pursuance of the report of Gadgil Committee in the post 2“ Pay Commission. This has, thereafter, been continued in the successive Central Pay Commissions also, wherein up to 50% of DA has been merged with the Pay when Dearness compensation exceeded 50%.

Dearness compensation has already reached 100% as on 01.01.2014, and it is further likely to exceed w.e.f. 01.07.2014, therefore, it would be grossly justified that, at least 50% DA be merged with Pay to compensate the erosion of the real value of the wages immediately.

The 7th CPC, appointed by the Government of India, has though started its functioning, nevertheless its report is expected to be available not earlier than 1 and 1/2 years time and because of uncontrolled skyrocketing price hike of essential commodities in the market, the real value of the wages is eroding the greatest extent, which is in no way being compensated even by sanction of Dearness Allowance/Dearness Relief.

It would, therefore, be imperative that, at least 25% of the Basic Pay of Central Government Employees, but not less than Rs.2000 should be sanctioned as “lnterim Relief” with immediate effect to compensate the sharp erosion in the real value of the wages.

We request your early intervention in the matter so as to provide necessary relief to the Central Government Employees.

(Shiva Gopal Mishra)

Download Letter dated 12.06.2014 of National Council (Staff Side), JCM on merger of DA with Basic Pay