National Council Writes to Finance Minister to Consider Merger of DA with Pay

Joint Consultative Machinery
for Central Government Employees
13-C, Ferozshah Road, New Delhi – 110001

I hope that, under your able leadership, the financial health of our country will achieve greater heights.

As you may be kindly aware, Joint Consultative Machinery (JCM) Scheme is in operation in Government of India with the object of promoting harmonious relations and of securing the greatest measure of cooperation between the Central Government, in its capacity as employer and the general body of its employees in matters of common concern, and with the object, further, of increasing the efficiency of the public services. The Joint Consultative Machinery (JCM) consists of the Official Side and the Staff Side.

We, as Staff Side, have raised a number of issues with the government, concerning the employees of the Government of India. Two of these issues are agitating the minds of the Government employees and need urgent resolution. These relate to Merger of Dearness Allowance with Pay and removal of the issue relating to Senior Promotee employees drawing less pay than the Junior Direct Recruit employee. Since these issues need decision at the level of Ministry of Finance, I am enclosing brief notes on the same for your kind perusal.

We are hopeful that, you will be kind enough to have them examined in a positive-manner

I would also be grateful, if you could spare some time from your busy schedule between 10th and 12th ” June, 2014, so that I may call on you to meet you in person.

With regards!
Yours sincerely,
Shiv Gopal Mishra

The wage revision of the Central Government employees is carried out through the Central Pay Commissions which, considering the magnitude of employees is a time consuming process. The 7 Central Pay Commission (CPC) set up by the Government will require a reasonable time frame to go into the matter judiciously especially because the implementation of 6m CPC recommendations have given rise to large number of issues and cadre related grievances.

During the past, the methodology adopted for compensating the erosion in the real value of wages due to price rise as reflected in high rate of DA to Government employees before the date of the submission of Pay Commission Report and its acceptance by the Government, had always been though the mechanism of merger of a portion of DA with Pay. The merger of DA to partially compensate the erosion in the real wages was first done in pursuance of the Gadgil Committee in the post 2nd Pay Commission period. The 3 CPC had recommended such merger of the DA when it crossed 36%, The Government agreed to merge 60% and later the whole of the DA before the 4°’ CPC was set up. The 501 CPC merged 98% of DA with pay. The 51h CPC had also recommended that the DA must be merged with pay and treated as pay for computing all allowances as and when the percentage of Dearness compensation exceeds 50%. Accordingly even before the setting up of the 6°’ CPC the DA to the extent of 50% was merged with pay.

Presently, the factual position is that as on 1.1.2014, the Dearness compensation is 100% and will exceed the same with effect from 1.7.2014. Since the 7°’ CPC has been set up and one of the issues to be dealt with by the CPC would relate to revision in the existing reference base of price index, it becomes all the more necessary that the Government takes steps to merge at least 50% of DA with pay to compensate the erosion of the real value of wages immediately.

The main issue in this case is that the 6th CPC for the first time recommended specific entry level pay for Direct Recruits (DRs). This resulted in employees who were appointed in service prior to the DRs and also got promoted earlier get less pay as compared to their counterparts recruited directly and who joined after 1.1.2006. It has always been the case that on promotion, the pay of a promoted employee is never fixed at less than the entry level of pay of that post as admissible to a direct recruit.

Consequent upon implementation of the recommendations of the 6th CPC, in respect of pay scales of various categories of staff, there are certain situations where the senior who were promoted before 01.01.2006 are getting lesser pay than their juniors promoted after 01.01.2006, on fixation of their pay w.e.f. 01.01.2006. This, being a serious anomaly, has been raised by us in the National Anomalies Committee for redressal thereof.

The consensus decision in the National Anomaly Committee was that the Staff Side as well as the Official Side agreed that wherever there is a provision of direct recruitment in the Recruitment Rules, pay on promotion would be fixed at the prescribed minimum of the Entry Pay as provided for the Direct Entrants in the Revised Pay Rules, irrespective of the fact whether direct recruitment has actually taken place or not. However to our distress it was later on learnt that the Government went back on this mutually agreed solemn resolution and did not issue any Order in this regard. This being a serious issue has resulted in discontentment prevailing among the seniors who are drawing less pay than is legitimately due to them.

A very simple solution to this issue is that orders may be issued to the effect that the pay on promotion w.e.f. 01.01.2006 would not be fixed less than at the prescribed minimum of the Entry Pay as provided for the Direct Entrants in the Revised Pay Rules, to eliminate this unfairness.