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Tuesday, July 29, 2008

System of calculation of DA to change for better ?

But still, as I always say, take it with a pinch of salt.
The Sixth Pay Commission award for government officials is likely to be sweetened with an upward revision in the dearness allowance (DA) entitlement. The committee of secretaries (CoS) looking into the recommendations made by the Sixth Pay Commission has suggested a change in the DA calculations. This could result in additional benefit of Rs 300-3,000 a month to a government employee, depending on her level. The CoS, headed by Cabinet secretary K M Chandrashekhar, is giving finishing touches to the report that is expected to be submitted soon. The report would then go to the Cabinet for approval. Government sources said the change has been suggested in the wake of an across-the-board protest by government employees against the way DA allowance was fixed. The Fifth Pay Commission had recommended that the 50% DA payable in April 2004 be merged with basic pay. The dearness pay was to be counted as basic pay for all practical purposes, including for retirement benefit. Thus, logically, as on January 1, 2006, the recommended date of Sixth Pay Commission award, the 24% DA payable should have been on a salary that included the 50% DA that was merged with basic pay from April 2004. In its calculation, however, instead of compounding the two DA components — 50% as on April 1, 2004 and 24% as on January 1, 2006 — the commission added them, yielding a figure of 74% composite DA. Consequently, while shifting to the concept of grade pay, the pay commission fixed the base salary as on January 1, 2006, at the basic pay drawn along with dearness allowance at the rate of 74%, and rounded it off to next multiple of 10. The anomaly resulted in a loss of roughly 7% to government employees. To put it simply, if an employee had a basic salary of Rs 100 on April 1, 2004, according to the Fifth Pay Commission calculation, he would have a total salary of Rs 150 (including 50% DA). A 24% DA on that would increase his salary to Rs 186 — and not Rs 174 on January 1, 2006, used as the base for calculating Sixth Pay Commission award. The committee of secretaries is understood to have proposed that the anomaly be corrected and the DA be fixed at 86% and not 74%. So, in case of a government employee in the Rs 2,550 pre-revised payscale, the revised pay in running pay band would become Rs 4,743 (increase of 86%) against Rs 4,440 (74% increase), a gain of over Rs 300. At the director level, in the payscale of Rs 18,300, the difference because of the change would be over Rs 2,000 a month

Click here to see this article (With thanks to Economic Times)

5 comments:

Lt Col G Kameswara Rao (retd) said...

It is good that the empowered commiittee has taken cognisance of this glaring anomaly. I had given this point in my memorandum submitted to them.It was preposterous for the VI CPC to have recommended subsuming of the Dearmess pay/pension. Calculating 74% DA/DR on basic pay/pension instead of 24% DA/DR on basic pay/pension + Dearness pay/pension, eliminates the 24% DA/DR on the Dearness pay/pension. I hope that the Govt will accept it and also other improvements suggested, if any, by the empowered committee.

Pardaman Singh said...

LT COL PARDAMAN SINGH(RETD)
There was a news that empowered committee has recommended that MSP should also be given from the date of imlementation of 6th pay commission report & not from a future date.I hope Govt takes cognisanse of this recommendation. It is very genuine recommendation as rank pay which is abolished,has now been merged in MSP.MSP should also be taken in to account while working out pension of old pensioners.

Anonymous said...

Lets stop risking our lives and protecting their fat asses and pot bellies from militants and when a few get bullets up there they will readily agree to any demand of armed forces.I guess this is the only way they can understand the importance of us. Otherwise vote bank is only attraction for them.it is sad that none of the senior officers are opening up their mouths against this balatant injustice to Lt Cols coz their pockets are full. Why should Cols and Brigs be paid MSP at 6000? Are they at more risk or discomfort than a Jawan?

V K Das said...

The banks are paying no attention to the details of the G of I letter regarding new pension scales. They are taking a short cut and paying everyone according to the table at annex 1 completely disregarding annex 2 and the provisions of the letter which requires them to pay at the scale more beneficial to the pensioner.The matter has been brought to the notice of the PCDA but he too is not bothered.Please beware of this pitfall.

Pokar Ram said...

Dear Major Navdeep sir,
Finance Ministry had issued orders for revised DA @ 16% with effect from 01 Jul 08 as well as 22% from 01 Jan 09 for implementation on revised pay structure. However DA rise to 54% from Jul 08 onwards for armed forces personnel still in pre-revised pay scale(like re-employed officers)is still awaited.Is there any embargo for such defence personnel getting DA rise till pay scales are revised whereas on civil side orders were issued in Oct 08 itself. Revision of pay scale for the re-employed can not be expected before elapse of five years as happened previously after Fifth CPC.