DA (Dearness Allowance) orders from 1.1.2014 issued today by the Government of India, DA fro period 1st January 2014 to 30th June 2014

The Dearness Allowance orders for the period starting 1.1.2014 were issued today by Ministry of Finance.  Download the order from here and enjoy your March End.

Consequent to this order all advances and allowances which have been specifically listed will increase by 25 % however there is no clarification on the amount of increase.  For eg. Festival Advance which is now Rs.3750.00 will it be increased by 25 % on 3750.00 or on the original amount of Rs.3000.00.  Clarifications regarding the same are awaited.

You and see and download the PDF file from below.  Comboupdates will put up the state government orders when they are issued.

Pay Commission News : Ministry of Finance launches Seventh CPC Website

The Government through Ministry of Finance launched a dedicated sub-domain for the Seventh Central Pay Commission and has put up the entire Terms of Reference of the 7th CPC.  

The Terms of Reference can be read below.  Comboupdates hopes to bring to you the latest and most practical news about the Seventh Central Pay Commission.

The original PDF file can be read here

10 percent Dearness Allowance hiked for Government Employees from 1.1.2014 (January 2014) but no clear verdict about the 50 % Merger

The UPA II's perhaps second last Cabinet meet gave the Government Employees a lot to cheer.  Not only did the Cabinet approve the 10 percent hike in Dearness Allowances for Government Employees but it also gave its approval for the Terms of Reference for the 7th Pay Commission.

The Dearness Allowance will now reach 100 percent of the Basic Pay + Grade Pay for all central government employees.  The Presser released by Press Information Bureau is given below :

The wordings in the third line of the press release infer that the Government employees wont require a separate order for increase of DA and the Government organisations can draw the arrears as well as salary from 1.1.2014 after 31.3.2014.   However Finance Ministry is expected to issue a formal order regarding the same.  

in cash, but not before the disbursement of the salary for the month of March 2014

While there is mixed news of 50 percent merger with Basic Pay. Some websites and eminent personalities have given contrarian views , I hold firm belief that this has been approved and made a part of the Terms of Reference of the VIIth CPC.  The ToR is briefly given below :

 7th Central Pay Commission

 The Union Cabinet today gave its approval to the Terms of Reference of 7th Central Pay Commission (CPC) as follows:-

a)      To examine, review, evolve and recommend changes that are desirable and feasible regarding the principles that should govern the emoluments structure including pay, allowances and other facilities/benefits, in cash or kind, having regard to rationalization and simplification therein as well as the specialized needs of various Departments, agencies and services, in respect of the following categories of employees:-

i.  Central Government employees-industrial and non-industrial;

ii. Personnel belonging to the All India Services;

iii.Personnel of the Union Territories;

iv.Officers  and   employees   of  the   Indian  Audit  and   Accounts Department;

v.Members of regulatory bodies (excluding the Reserve Bank of India) set up under Acts of Parliament; and

vi.Officers and employees of the Supreme Court.

b) To examine, review, evolve and recommend changes that are desirable and feasible regarding principles that should govern the emoluments structure, concessions and facilities/benefits, in cash or kind, as well as retirement benefits of personnel belonging to the Defence Forces, having regard to historical and traditional parities, with due emphasis on aspects unique to these personnel.

c) To work out the framework for an emoluments structure linked with the need to attract the most suitable talent to Government service, promote efficiency, accountability and responsibility in the work culture, and foster excellence in the public governance system to respond to complex challenges of modern administration and rapid political, social, economic and technological changes, with due regard to expectations of stakeholders, and to recommend appropriate training and capacity building through a competency based framework.

d) To examine the existing schemes of payment of bonus, keeping in view, among other things, its bearing upon performance and productivity and make recommendations on the general principles, financial parameters and conditions for an appropriate incentive scheme to reward excellence in productivity, performance and integrity.

e) To review the variety of existing    allowances presently available to employees in addition to pay and suggest their rationalization and simplification, with a view to ensuring that the pay structure is so designed as to take these into account.

f) To examine the principles which should govern the structure of pension and other retirement benefits, including revision of pension in the case of employees who have retired prior to the date of effect of these recommendations, keeping in view that retirement benefits of all Central Government employees appointed on and after 01.01.2004 are covered by the New Pension Scheme (NPS).

g) To make recommendations on the above, keeping in view:

i.  the economic conditions in the country  and need for fiscal prudence;

ii. the need to ensure that adequate resources are available for developmental expenditures and welfare measures;

iii. the likely impact of the recommendations on the finances of the State Governments, which usually adopt the recommendations with some modifications;

iv.the prevailing emolument structure and retirement benefits available to employees of Central Public Sector Undertakings; and

v. the best global practices and their adaptability and relevance in Indian conditions.

h) To recommend the date of effect of its recommendations on all the above.

The Commission will make its recommendations within 18 months of the date of its constitution.  It may consider, if necessary, sending interim reports on any of the matters as and when the recommendations are finalised.

The decision will result in the benefit of improved pay and allowances as well as rationalization of the pay structure in case of Central Government employees and other employees included in the scope of the 7th Central Pay Commission.

My belief stems from the following line of the Terms of Reference

It may consider, if necessary, sending interim reports on any of the matters as and when the recommendations are finalised.

The emphasis of this line is that the 7th CPC may recommend any interim payment to the Central Government employees as it deems necessary.  This also means that all further orders regarding the pay and allowances will be issued by the 7th CPC.  This way the UPA would have circumvented the Model Code of Conduct for polls as the merger will now not be a policy decision but a decision made by a parliament/cabinet approved body.

However this is open to interpretations.  Today many news channels are also giving opposite view and the PIB/Government website dont reveal much so it is now left open to interpretations.

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.

7th Pay Commission News : Pay Panel members to be named, 50 % DA to be merged and Age of retirement to be increased

The UPA - II Government is going to decide about the General Election dates in March 2013 and before that the news is that Government employees may get there 50 % DA merged into the basic pay.  Alongwith this decision, the government will also announce its decision for raising retirement age of government employees to 62.  And in a separate news, the Government will constitute the for 7th Pay Commission.  We take a look at all the above information one by one.

The Pay Panel is to be constituted before March as per reports available.  The Central government has already made SBG (Budget Grant) provision of Rs.3.5 crores towards constitution of the Panel in this fiscal year 2013-14. Once constituted, the 7th Pay Commission will be mandated to submit its report in two years i.e. by March 2016.  UPA-II will also be following the laid practice of naming a former Supreme Court Judge to head the commission and its other members would include experts and officials.  Though the date of implementation of 7th Pay Commission is 1.1.2016, it will be in the hands of the Party which wins the General Elections in 2014.

The second news that is making rounds is that DA of 50 % is to be merged with your basic pay.  The 6th pay commission explicitly not allowed the merger of DA with Basic as soon as it crosses 50 %

"The 6th Central Pay Commission had recommended not to merge Dearness Allowance with basic pay at any stage," 

But since its election time and with the fast soaring inflation, it may seem that UPA-II might just agree to this demand.  In any case, if it were to decide to merge 50 % DA with basic, it has to do so before March because at that point and time it will be 100 % (90% current plus 10 % from 1.1.2014.)  There is also the impact of 25% rise in all allowance in case DA crosses 50 % for government to consider. 

The file concerning the raising of age of retirement of government servant to 62 is under due consideration in Ministry of Finance as of now.  With the Elections due in May-June, the Finance Ministry will have a interim budget this year for fiscal 2014-15 and the vote-on-account for this Interim Budget is scheduled to be in an around 2nd week of February 2014.  So without putting too much expectations on the budget 2014-15, we can hope that this two important matters are approved in this interim budget.

What makes the decisions difficult for the UPA-II is the utter failure of the popularist measures and freebies announced by it prior to the recently concluded state elections in Delhi, Madhya Pradesh, Rajasthan and Chhatisgarh.  Some of the psephologists have blamed these freebies for the whitewash UPA suffered in these state elections.  This actually makes it a little more difficult for those who are in favour of announcing populist measures before the General Election dates are announced.   

Government servants can keep their fingers crossed and hope that UPA-II is in a full Election mode.

Updtate : 50 % DA merger approved by Cabinet 20.2.2014 Read here