The talks related to the 7th Pay Commission have piqued the interest of the government employees as it creates a buzz in the minds of the people that if the Dearness Allowance (DA) is to be merged with their basic pay. The talk suggests that this might happen before the revision takes place in January 2025. Let’s know more about it and what it means.
What is Dearness Allowance (DA)?
Dearness Allowance is cost-of-living adjustment which is provided to government servants and pensioners to remove the impact of inflation, thereby reducing their purchasing capacity. It is revised on a half-yearly basis in January and July based upon changes in AICPI.
At present, DA hovers around 53% of the basic pay of central government employees following successive hikes. This has led to whether the DA would be merged with the pay base in the recommendations of the 7th Pay Commission.
Why is DA Merger Significant?
Merging DA with basic pay directly relates to the financial structure in an employee’s salary package. Once merged, they result in a higher basis for basic salary, as other allowances and benefits follow the percentage of basic pay, like HRA or gratuity. So employees are highly awaiting the announcement of the DA merger before 2025.
Will DA Merge Before 2025?
Reports say that the central government is planning to merge the prevailing DA with the basic pay before the next pay revision scheduled for 2025. No confirmation has, however, been made about it so far. Many feel that merging DA at 53% will easily tide over the transition needed to bring in the new framework of the 8th Pay Commission and perk up the morale of its employees.
What’s Next for Government Employees?
It is going to be a great financial upgrade for employees awaiting clarity as any potential DA merger would signify. However, it remains to be seen whether the government will move forward with the merger or wait for a formal review during the 2025 revision. For now, employees are advised to stay updated on official announcements as the discussions progress.
