Expected da from July 2011

We feel features, expectations and calculations are on the forefront for most of the central government employees regarding the additional Dearness Allowance from July, 2011 to be announced soon.

There will be no change in the 7% DA unless a huge change takes place in the month of June AICPIN (i.e.if the AICPIN falls below 180 points or increase above 195, a change of DA can take place, but chances are very remote.) AICPIN now stands at 187.

Surprisingly, some employees are eager to know if the DA crosses 100%, it will merge with the basic pay or not.
There is no such recommendations said in the 6th CPC.The allowances only will be increased by another 25%, every time the DA crosses 50%.

As of now, the important increase in the allowance is Children Education Allowance and Hostel Subsidy. It was increased from Rs.12000 to Rs.15000 from 1.1.2011. This will be increase upto Rs.18750 after the Da crosses 100% and some other allowances also will be enhanced by 25% from the existing rates.

Assumption are that the DA will touch 100% in the next three years. Before the 7th CPC, which will be from 2016, the DA surely crosses 100%.

The DA was merged with the basic pay as happened in the year 2004, the 5th CPC had recommended that DA should be converted into Dearness pay each time the CPI increase by 50% over the base index used by the Pay Commission.



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For your information :-
Have a look the order published from Finance Ministry on 1st March, 2004 regarding the Merger of 50% of DA and DR with basic pay / pension to Central government employees / pensioners w.e.f.01.04.2004.

F.No. 105/1/2004-IC
Government of India
Ministry of Finance
Department of Expenditure

New Delhi, dated the 1st March, 2004

OFFICE MEMORANDUM

Subject: Merger of 50% of Dearness Allowance/Dearness Relief with basic pay/pension to Central     Government employees/pensioners w.e.f. 01/04/2004.

             The Fifth CPC in para 105.11 of their report had recommended that DA should be converted into Dearness Pay each time the CPI increase by 50% over the base index used by the Pay Commission.

2.          This recommendation of Fifth CPC has been considered and the President is pleased to decide that, with effect from 01/04/2004, DA equal to 50% of the existing basic pay shall be merged with the basic pay and shown distinctly as Dearness Pay (DP) which would be counted for purposes like payment of allowances, transfer grant, retirement benefits, contribution to GPF, Licence fee, monthly contribution to CGHS, various advances, etc. The entitlements of LTC, TA/DA while on tour and transfer and government accommodation shall, however , continue to be governed on the basis of the basic pay alone without taking into account Dearness Pay. In case of existing pensioners, Dearness Relief equal to 50% of the present pension will, w.e.f. 01/04/2004, be merged with pension and shown distinctly as Dearness Pension. Dearness Allowance/Dearness Relief converted into Dearness Pay/Dearness Pension respectively would be deducted from the existing rate of Dearness Allowance/Dearness Relief.

3.         To ensure that pensioners retiring between 01.04.2004 to 31.01.2005 do not face any loss in fixation of pension, as a special dispensation in their case, DA equal to 50% of the basic pay would be treated as basic pay for purposes of computation of pension in respect of basic pay received by them prior to 01.04.2004. Consequently, element of dearness pension will exist only for pensioners retired/retiring from Government of India up to 31.03.2004.

4.        Insofar as the persons serving in the Indian Audit & Accounts Department are concerned, these orders issue after consultation with the Comptroller & Auditor General of India.

(SUSHMA NATH)
Joint Secretary to Government of India