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Govt clears 10% DA hike for Central staff
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Govt clears 10% DA hike for Central staff

Govt clears 10% DA hike for Central staff
Girja Shankar Kaura
Tribune News Service

New Delhi, February 28
The Union Cabinet today raised dearness allowance (DA) for Central Government staff to 100% from existing 90%, benefiting 50 lakh employees and 30 lakh pensioners.

The decision comes ahead of the imposition of the model code of conduct by the Election Commission. This is the second double digit DA hike in a row.

The government had announced a hike of 10 per cent taking it up to 90 per cent in September last year, effective from July 1, 2013.

"The Union Cabinet approved the proposal to release an additional instalment of DA and dearness relief (DR) to pensioners with effect from January 1, 2014, in cash, but not before the disbursement of the salary for the month of March 2014 at the rate of 10 per cent increase over the existing rate of 90 per cent," said an official statement.

The government also approved the terms of reference of the 7th Pay Commission, a move which would pave the way for merger of 50 per cent DA with basic pay. The Commission can now suggest the merger in its interim report. The 50 per cent DA merger with basic pay will roughly increase the gross salaries of central government employees by around 30 per cent. It cleared a proposal to ensure Rs 1,000 minimum monthly pension under a scheme of retirement fund body EPFO that would benefit 28 lakh pensioners from April 1. Earlier this month, the EPFO trustees had approved the proposal, which would cost the government an additional Rs 1,217 crore.

Source Link: http://www.tribuneindia.com

03-01-2014 08:47 AM
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Cabinet clears 10% rise in DA

Pay panel to recommend on merger of 50% DA with basic pay

The Union Cabinet on Friday approved a 10 per cent rise in dearness allowance (DA) for central government employees and pensioners. It also decided to ask the 7th Pay Commission to look into the issue of merging 50 per cent DA with the basic pay of employees and retired staff, said a senior government official.

With the decision to raise DA, the allowance will be 100 per cent of the basic pay against 90 per cent at present, sources said. The decision will be effective from January. The move will benefit five million staffers and three million pensioners; it comes on the eve of the Lok Sabha poll schedule announcement. Once that is done, the model code of conduct takes effect, barring such decisions.

Normally, the government raises DA to its employees twice a year. It had announced an earlier 10 per cent rise in September last year, effective July 1, 2013. It uses Consumer Price Index-Industrial Workers data of the past 12 months to calculate the raise.

Pay panel

As for the merging of 50 per cent DA with basic pay, the Cabinet decided this would be part of the terms of reference for the Pay Commission, constituted recently under the chairmanship of former Supreme Court judge Ashok Kumar Mathur. The Commission has been asked to examine and recommend the emoluments structure — pay, allowances, etc — of central government employees. Staff of regulatory bodies set up under Acts of Parliament, except the Reserve Bank, would also be covered.

Source Link: http://www.business-standard.com

03-01-2014 09:01 AM
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RE: Govt clears 10% DA hike for Central staff

With the decision to hike DA, the allowance will be 100% of the basic pay against 90% at present, sources said. The decision will be effective from January.

The move, which will benefit 50 lakh employees and 30 lakh pensioners, comes ahead of elections. Once model code of conduct kicks in, the government will not be able to take these decisions. However, the government does give hike in DA to its employees twice a year. The government had announced a hike of 10 percentage points to 90% in September last year, effective from July 1, 2013.

The government uses Consumer Price Index- Industrial Workers data of the past 12 months to arrive at a raise in DA.

Terms of reference (ToR) of 7th pay commission:

The Cabinet asked the commission, constituted recently under the chairmanship of former Supreme Court judge Ashok Kumar Mathur, to look into the feasibility of merging 50% DA with the basic pay. This is part of ToR of the commission.

The commission was asked to examine, review, evolve and recommend emoluments structure including pay, allowances etc of central government employees. The employees of regulatory bodies, except RBI, set up under Acts of Parliament would also be covered.

It was also asked to examine the existing schemes of payment of bonus.

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

Source Link: http://smartinvestor.business-standard.com

03-01-2014 09:05 AM
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RE: Govt clears 10% DA hike for Central staff

Decision on merging DA with basic pay after Pay Commission recommendation

NEW DELHI, FEB 28:
Come elections, and the bonanzas have begun. On Friday, the Cabinet cleared a 10 per cent hike in dearness allowance (DA) and dearness relief (DR) for 50 lakh serving and 30 lakh retired Central Government employees, offering them some relief from rising prices of essential commodities.

This is the second successive 10 per cent increase, making the total DA/DR equal to 100 per cent of basic salary. The additional DA will be applicable from January 1, but will be paid only after the disbursement of March salary.

DA/DR is revised twice a year on the basis of change in retail inflation for industrial workers. The first revision comes into effect from January 1, and the second, from July 1.

The DA hike will cost the exchequer around ₹6,390 crore in 2014-15, and if two months of the current fiscal (January and February) are added, then the amount will increase to ₹7,455 crore. Similarly, the annual outgo on account of DR will be ₹4,684 crore and ₹5,465 crore for the 12 and 14 months, respectively.

However, the decision regarding merger of DA/DR up to 50 per cent will be taken only after the Seventh Pay Commission finalises its recommendations. A senior Government official said the Cabinet had approved the terms of reference for the commission, which include merging of DA with basic pay.

This will facilitate announcement of interim relief. Earlier, the practice was to merge DA if it reached 50 per cent of the basic pay. A merger helps a person draw higher allowances, as these are a proportion of basic pay. It is estimated that the merger will lead salaries rising by up to 30 per cent.

Merger issue

The Sixth Pay Commission did not talk about merger. As a result, with the continuous increase, DA has now reached up to 100 per cent of basic pay. Employees unions, too, have been demanding merger of DA with basic pay.

The Government announced the setting up of the Seventh Pay Commission last year, headed by Ashok Kumar Mathur, a retired Supreme Court judge and retired Chairman of the Armed Forces Tribunal, with Petroleum Secretary Vivek Rae as full-time member.

The committee is likely to submit its report in next 20 months and its recommendations are likely to be implemented from January 1, 2016.

Source Link: http://www.thehindubusinessline.com

03-01-2014 09:11 AM
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