Recently, the government made a big announcement about the Dearness Allowance (DA) for central government employees, promising to introduce a big change here. In the latest move, the DA is supposed to get merged with the basic salary, and from there onwards, the future DA increments will start calculation from a zero base. Although this is a technical change, it will impact salaries, allowances, and future pay increases for lakhs of employees.
The Government Merger DA For Central Government Employees
The marshal has decided to dissolve the ongoing DA, which in itself is 50% or above for central government employees, into the employee’s basic salary. After this dissolution, the new future DA increase will be reset to zero, indicating that any future increases in DA would be calculated afresh based on changing inflationary trends and corresponding cost of living changes.
DA merging is not a new thing; it has happened many times in the past when the DA exceeds a ceiling limit, usually at 50%. The intent behind merging the DA within the basic salary is to demonstrate reliance on rising inflation and reflected directly in the main salary to demonstrate higher resultant allowances like HRA, TA, etc., and retirement benefits.
Employees: Anticipated Impact
- Increase in Basic Salary: Employees’ basic pay shall be increased directly from merging DA.
- Enhancement of Allowances: Automatically increased with basic pay allowances e.g., HRA, TA which includes medical covered.
- New DA Cycle: It resets DA, and new increments will be smaller initially yet massive with inflation rates over time.
- Pensioners Stand to Benefit: More favorable pension calculations as last drawn basic salary is the key factor in determining pensions.
How Soon Will The Change Come?
It seems that a formal notification for the DA merger may be forthcoming shortly, around July 2025, when the next DA revision is due. Once this is carried through, the salary structure assigned to central government employees will be made more reflective of the market’s realities and inflation trends.
Conclusion
The merger of DA is really an excellent initiative for central government employees and the pensioners, as it makes their salaries and pensions more reflective regarding the rising costs of living in the present scenario. Starting with the new calculations from zero may delay processing the next DA, but the higher basic salary will surely give employees financial security in the long run.
So, wait for the announcement on this and the expected calculation methods the government will go soon!
Also Read: Retirement Age Hike: Class 2 & 3 Employees Get Big Boost With Extra Benefits