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Ahead of the general elections, the Centre has announced measures to woo Government employees and pensioners and minorities.
The Cabinet approved the terms of reference for the 7th Pay Commission. Government officials said that these include merging of dearness allowance (DA) with basic pay.
Earlier, the DA was merged with basic pay, only after it touched 50 per cent of the basic pay. The merger will help in drawing higher allowances as these are a proportion of the basic pay.
It is estimated that the merger will raise salaries by up to 30 per cent
The Sixth Pay Commission did not talk about a merger. The result is that with continuous increase, DA has now reached up to 90 per cent of the basic pay. A DA revision has been due since January 1 and it is expected that the decision to hike DA by 10 per cent will be taken in the next few days.
If that happens, then DA will be equal to the basic pay. Employees unions are pressing hard for a merger of DA with basic pay.
The Government announced the setting up of 7th Pay Commission in 2013.
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