DA correction to add to pay panel’s goodies

he 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.

source : The Economic Times