DA increase

Union Cabinet approved increase of  DA by 10 % wef 1-1-2014.

DA 10 % ; 7CPC

The Union Cabinet is expected, on next Friday,  to consider raising the DA by 10 % (wef 1-1-2014). This will make the DA 100 %  !!  This will benefit 50 lakh serving employees and 30  lakh pensioners.

The terms of reference of the 7th Central Pay Commission is likely to be approved by the Cabinet on this day.

DA merger with Basic Pay

Newspaper reports :

The Union Cabinet could approve a proposal to merge dearness allowance (DA) with basic pay, benefiting about 50 lakh central government employees and 30 lakh pensioners.
The Cabinet may also hike dearness allowance (DA) by 10 percent to 100%. 
As per practice, the DA is merged with basic pay when it breaches the 50% mark. DA merger helps employees as their other allowances are paid as a proportion of basic pay.

100 % DA : What Economists would say ?

This is the title news of  Malayala Manorama dated 3rd January.

The report indicates that  this situation ( 35% increase over the last two years ) is due to the high rate of inflation. True.  Economists would say  that the DA increase (and so the total wages  ) is a reason for the increase in Inflation, though not the only reason. ie. It's a Catch22 situation !  The question is, should the high wages be controlled for controlling the inflation ?  Yes and No.

But the fact is, Economists and so the Govt would think of  limiting the annual wage rises, not only in Govt sector, but also in Private and other sectors as well, as a means to control Inflation.

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