Sunday, April 7, 2013

Announcement of DA from Jan 2013: Speculation of reasons for delay

After implementation of recommendations of Sixth Pay Commission the Govt. has accepted the calculation of standard formula for calculation of future DA and in para 4.1.19 Sixth Pay commission has recommended that DA may continue to be sanctioned twice a year as on 1st January and 1st July payable with the salary of March and September. After 6th CPC implementation order of DA from January of respective years was issued/declared as follows:-

15/3/2007- 6% – Thursday
07/3/2008 -6% – Monday
26/2/2009- 6% – Thursday
19/3/2010 – 8% – Friday
22/3/2011- 6% – Tuesday
23/3/2012 -7% – Friday

DA from January, 2013 is yet to be announced. No any reason for delay is stated from any reliable sources and no exact reason can be constitute for it. Now everyone to speculate the reason for delay in announcement. The following main facts are presented to inspect the reasons:

1. Merger of DA with Basic Pay: This is the first reason is everyone's mind.

Positive points are for this reason:-
(a). Unexpected delay in announcement - Traditionally DA for January should be announced in the Month of March. There is no complicated formula for calculation of expected DA. Only formal announcement was to made by Govt. 
(b). 2014 General Election - Next General Election is in near future. All are expecting that Govt. may consider about merger of DA in view of the inflation and vote bank.
(c). Union Minister Ajay Maken's letter to PM about inflation - This letter showing that some part of Govt. is also in favour of enhancement of pay and allowances of Central Government Employees. [click here to see]
(d). Employee Unions are pressing hard for merger of DA.
(e). In press clip for expectation of announcement of DA on 2th April mostly news article added that confederation has demanded the merger of DA and in practice govt. merged the DA when it reach 50% cap. [click her to see press clip]

Negative points of this reason:-

(a) 6th CPC has not recommended for merger of DA. In Para 4.1.18 of recommendation of 6th CPC :
4.1.18 ……This conversion, however, is not necessary in the revised structure being recommended where increments are payable as a percentage of the pay in the pay band and grade pay thereon and provision has been made for all allowances/benefits to be revised periodically linked to the increase in the price index. The Commission is, therefore, not recommending merger of dearness allowance with basic pay at any stage.
(b) Recently Govt. already denied any possibility of merger of DA. [click here to see]

2. Delay in announcement due to administrative reasons:- Finance Minister, who is the main authority to approve the DA was on tour in past. In practice decision of approval of enhancement in DA can be taken in Cabinet Meeting [meeting of Economic Affairs]. On the constitution of meeting of economic affairs on 2nd affairs the media had expected on 1st April that enhancement in DA will be approved by Govt. But in absence of Finance Minister the meeting which was chaired by PM deferred the hike in DA including other major decision related to Finance Ministry.

The next meeting of Cabinet Committee of Economic Affairs was also placed on 4th April but there was no any indication about approval of DA, however govt decontrolled the lavy on sugar.

The decision on hike in DA by CCEA is based on some calculation about impact of enhancement of DA in govt. budget. The administrative reason for delay may be insufficient calculation or any mis-calculation of impact of enhancement of DA.

In the conclusion even after the seventh day of the month of April, the enhancement in DA from January, 2013 is yet to be declared by the Government. On Tuesday or Thursday [traditionally the meeting day of cabinet] decision may be taken by Govt. This time if formal announcement not made by Govt. and any written approval was got by authority to hike in DA, we expect the direct formal order from Department of Expenditure. All knows the announcement of DA hike can be delayed but not denied.

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