Merge Dearness Allowance (DA) into Basic Pay by the central government? This is a question that every government employee is asking himself at this time. The discussion of this issue has heated up afresh come May 2025. as per sources, the Finance Communication Ministry is seriously considering this proposal which will benefit lakhs of employees and pensioners. We will also update you on the latest news regarding all this and what changes can happen in the future.
What Is DA Merger And Why It Is in The Discussion?
Dearness Allowance is an allowance that is linked to inflation and reviewed every six months. At the moment, it’s over 50% of the basic pay. So merging DA involves adding it to basic pay, which will have a good effect on salary revision for the future and pension calculation. Employee unions have been pushing for this for several years.
What Is The Latest Status In May 2025?
As per the information received from the Ministry of Finance, the government is taking a decision on the DA merger pending the final evaluation of its cash implications. Sources also mention that a major decision may come on this by July 2025. However, an official confirmation is awaited. The employee unions have demanded a swift decision on this issue.
How Much Will The Salary Increase Due To DA Merger?
Any increase in pay due to the merger will depend on changes in the basic salary. To illustrate, let us assume an employee’s current basic salary is ₹ 50,000 with DA of 50%: after the merger, the new basic would be ₹ 75,000. In addition, this Basic will increase the future calculation of their pensions; however, the effect will be more of an indirect nature whereby salaries will benefit in future revisions.
Would Pensioners Gain Anything?
The merger of DA will be most beneficial for pensioners. Currently, pension is calculated on the basis of last basic pay. If DA gets merged, then basic pay will enhance which will result in an enhancement in the amount received by our pensioners. This will especially help out pensioners who had retired a long time ago.
Why Is The Government Delaying?
Putting together the DA merger becomes a huge economic burden to the government. It is estimated that it may cost the government another Rs 1.5 lakh crore per year. This is why the government plans to discuss this matter thoroughly. Some experts believe that a phased implementation may work.
What Next?
Henceforth employees’ unions have been requesting a cut-off date of June 2025 for this merger. If the government decides favorably, it might be implemented along with the 8th Pay Commission. Employees and pensioners should keep looking out for the government’s notifications.
Also Read: 8th Pay Commission Proposes Major Pension Hike For Central Government Retirees