DA Hike For Central Government Employees Not To Result In Merger Into Basic Pay

The hike in dearness allowance announced for central government employees last week will not result into the merger of DA into their basic pay, as per an office memorandum issued by the Department of Expenditure.

The memorandum, dated Oct. 21, 2024, said that the 3% hike in DA announced by the Centre has raised the key allowance to 53% from 50% at present.

The DA will "continue to be a distinct element of remuneration" and will not be treated as pay within the ambit of the basic wage, it stated.

The clarification puts to rest the speculation of a revision in basic pay on account of the increase in DA. The merger of DA into the basic pay would have consequently led to a revision in various other allowances, including the house rent allowance.

Notably, the 5th Pay Commission—whose recommendations were applicable from 1996 to 2006—had recommended to merge DA with basic pay once its crosses the 50% threshold. This recommendation was annulled by the 6th Pay Commission.

The 7th Pay Commission, which was formed a decade ago, had proposed that the basic pay should be automatically revised once the DA crosses 50%, according to employee unions. However, that proposal had not received the government's nod, a senior official of the Confederation of Central Government Employees and Workers said.

All India Railwaymen's Federation chief Shiv Gopal Mishra expects the 8th Pay Commission to recommend that the basic pay should be raised once the DA crosses 50%. "The 7th Pay Commission had proposed it. Later, it was not approved by the Centre. We will certainly raise this demand before the 8th Pay Commission," he said.

Notably, the DA hike for central government employees received the Union Cabinet's nod in the meeting held on Oct. 16. The hike would come into effect retrospectively, from July 1, 2024. Along with the DA, the dearness relief which is paid to pensioners was also raised by 3%.

The Cabinet decision, which benefits around one crore central government employees and pensioners, came ahead of the upcoming festival of Diwali.

Read the full official memorandum on DA hike below:

North Block, New Delhi Dated the 21st October, 2024

Subject: Revision of rates of Dearness Allowance to Central Government employees- effective from 01.07.2024.

The undersigned is directed to refer to this Department's Office Memorandum No. 1/1/2024- E.II (B) dated 12th March, 2024 on the subject mentioned above and to say that the President is pleased to decide that the rates of Dearness Allowance payable to Central Government employees, shall be enhanced from 50% to 53% of the Basic Pay with effect from 1st July,

2024.

2. The term Basic Pay in the revised pay structure means the pay drawn in the prescribed Level in the Pay Matrix as per 7th CPC recommendations accepted by the Government, but does not include any other type of pay like special pay, etc.

3. The Dearness Allowance will continue to be a distinct element of remuneration and will not be treated as pay within the ambit of FR 9(21).

4. The payment on account of Dearness Allowance involving fractions of 50 paise and above may be rounded to the next higher rupee and the fractions of less than 50 paise may be ignored.

5. These orders shall also apply to the civilian employees paid from the Defence Services Estimates and the expenditure will be chargeable to the relevant head of the Defence Services Estimates. In respect of Armed Forces personnel and Railway employees, separate orders will be issued by the Ministry of Defence and Ministry of Railways, respectively.

6. In so far as the persons serving in the Indian Audit and Accounts Department are concerned, these orders are issued in consultation with the Comptroller and Auditor General of India, as mandated under Article 148(5) of the Constitution of India.

(Abhimanyu Sahoo)

Deputy Secretary to the Government of India.