No DA Merger: Government Clarifies Stance Amidst Inflation Concerns

The Central Government has recently put to rest speculations regarding a potential merger of Dearness Allowance (DA) with basic pay for its vast workforce of employees and pensioners. In a clear statement, the government clarified that such a move is currently not under consideration, despite persistent demands from various employee unions.

This clarification comes at a time when unions have been advocating for an interim DA merger, citing the escalating inflation rates that have significantly eroded the purchasing power of fixed-income earners. Dearness Allowance is a crucial component of salary and pension, intended to offset the impact of inflation on living costs. It is typically revised twice a year, based on the Consumer Price Index for Industrial Workers (CPI-IW).

While a DA merger with basic pay has happened in the past, most notably following the recommendations of the 5th Pay Commission when DA reached 50% of the basic pay, the present scenario appears different. A merger fundamentally recalibrates the entire pay structure, impacting allowances and other benefits that are calculated as a percentage of basic pay. The government’s current stance suggests a cautious approach, possibly weighing the significant fiscal implications and the existing mechanism of regular DA revisions.

For central government employees and pensioners, this announcement means that the fight against inflation will continue to rely on the periodic DA hikes rather than a structural overhaul of their basic pay. The dialogue between the government and unions on this critical issue is likely to evolve as economic conditions fluctuate.