The government, in a surprising turn of events much to the disappointment of many central government employees, has declared the merger of Dearness Allowance (DA) into the basic salary but refused any kind of fitment factor hike in 2025. There were some whispers that, joining the DA merger, a hefty salary enhancement was to be looked forward to, followed thereafter by this announcement.
DA Will Be Merged With Basic Pay
It is customary for the government to merge DA into the basic salary once it crosses the 50 percent limit, which happened earlier this year. DA has been merged with basic pay as expected, thus optimizing the salary structure and facilitating future computations. However, the key disappointment was that the employees expected a fitment factor rise with the merger, which would have substantially raised their take-away salaries.
Looks Like The Prospective Fitment Factor
The key parameter for revising basic pay allowance stays unchanged as per regular practice. Early intense speculation suggested that the government was considering an increase in the fitment factor from the current level of 2.57 to anywhere above that, thus resulting in a major salary increase. Apparently, with the new clarification of the government, central employees will be made to wait for a fitment increase tied possibly to the setting up of the 8th Pay Commission, which may be in the offing soon.
At least for now, central government employees stand to gain from a salary structure that is even more consolidated than before, owing to the merger of the DA. While this would serve to increase pension benefits as well as future allowances based upon the new basic, one major disappointment that many have faced is that fitment hike, going by this logic, will not come immediately.
DA Hike Update
Unions representing employees have expressed disappointment and are planning to appeal to the government. They argue that with rising inflation and costs for living and moreover the problems arising due to covid, it would be a matter of fair play to consider a full-fledged immediate revision of the fitment factor, except for just normal DA hikes.
In the meantime, experts believe that while merging the DA is a progressive move towards reviewing the pay matrix, it only partially achieves the intended immediate financial relief to central employees without any revision in the fitment factor. Now many are banking on the 8th Pay Commission with big expectations for salary reforms anticipated circa 2026.
Conclusion
The DA merger sure looks good on paper; however, the lack of a fitment hike will keep government employees waiting for the real “salary boost” they were hoping for in 2025.
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