SEVENTH PAY COMMISSION – 7TH CPC
TERMS OF REFERENCE TO INCLUDE DA MERGER AND INTERIM RELIEF – CABINET LIKELY TO
APPROVE 7TH CPC TERMS OF REFERENCE SOON
In a bid to woo central government
employees ahead of General Elections, the UPA government is expected to ask the
seventh pay commission to consider merging 50% dearness allowance with basic
pay of the employees.
This will form part of the 7th CPC
terms of reference (ToR), to be considered by the Cabinet this week. The
Commission may suggest interim relief as well.
Officials said the ToR of the Pay
Commission categorically states that a proposal in this regard should be
actively considered.
The hikes will be all the more
appealing as the Centre is expected to increase the dearness allowance by 10%
to 100% by the end of February. Usually, the DA is merged with the basic pay
when the former goes beyond 50%. However, DA is 90%, but it has not been merged
so far.
Assuming an employee gets Rs 100 as
basic pay and Rs 100 as DA at present, the basic will rise to Rs 150, even if
50% allowance is merged.
A higher basic pay will also impact
the house rent allowance (HRA) of employees as it is calculated at 30% of the
basic pay for central government employees.
Dearness Allowance is linked to the
consumer price index (industrial workers). The government uses CPI-IW data of
the past 12 months to arrive at a quantum for calculating any DA hike. The
allowance will be announced from January. As such, the retail inflation for
industrial workers between January 1 to December 31, 2013 would be used to take
a final call on the matter. The average inflation during this period had stood
at 10.66%.
Earlier this month, the government
had constituted the Pay Commission under the chairmanship of former Supreme
Court Judge Ashok Kumar Mathur.
The other members of the panel are
Petroleum Secretary Vivek Rae (full-time member), National Institute of Public
Finance and Policy Director Rathin Roy (part-time member) and Officer on
Special Duty in the Expenditure Department Meena Agarwal (Secretary).
The Commission’s recommendations
would be implemented from January 1, 2016, officials said. However, it may
recommend interim relief as well, they added.
The recommendations of the
Commission, will directly benefit almost 50 lakh employees and 30 lakh
pensioners. Employees of states governments which will adopt the
recommendations of the 7th Pay Commission will also benefit.
Source: Business Standard
