UPA Government's gift for Central Government employees, 50 % merger of DA with basic pay approved by Cabinet

As predicted by me, the Cabinet today approved the merging of 50 percent Dearness Allowance with Basic for all Central Government employees.  The merger of 50% DA with basic has been included in the Terms of Reference for the 7th Pay Commission Panel lead by Retired SC Judge Ashok Kumar Mathur.

Though the reports are sketchy at this moment in absence of any concrete order or communique from the Government in this regard, the minutes of Cabinet Committee which approved the same is given below :

In order to benefit over 50 lakh employees and over 30 lakh pensioners, the Cabinet also approved terms of reference for seventh pay commission. This includes merging dearness allowance above 50 per cent with basic pay. 

The order for merger of 50 percent Dearness Allowance with Basic Pay will now be recommended by the 7th CPC Panel chaired by Justice Mathur.  After which the Government/Finance Ministry will issue specific orders regarding the same.  It is hoped that the 7th CPC will issue orders regarding the merger in the month of April 2014.  

The Cabinet is also likely to approve the hiking of DA from January 2014 by 10%.  The net effect of this hike will result in 100% Dearness Allowance with effect from Jan 2014 till the date of issue of 50% DA merger orders.  From the date of merger(which can be retrospective) the 7th CPC will issue new Dearness Rates.  Both the orders are expected to be issued simultaneously. 

Sadly the issue of raising of the retirement age in respect of Central Government employees to 62 years was not considered.