After the announcement of 43% fitment by Andhra Pradesh and Telangana State Governments to its employees in 10th PRC (i.e., PRC 2015), it has been a hot topic among employees on calculating how much benefit they are getting from this PRC. One of the burning topics is also that the 0.524% DA (Dearness Allowance) to State Govt Employees to every 1% of Govt of India Central DA as proposed by PRC Commission is Gain or Loss ?. Some are stating and sending messages that there is huge loss as the Present DA Ratio is 0.856% looks far better than to the proposed 0.524%.. Hence apteachers.in has decided to discuss briefly on this matter with some examples.<!-more->
First of all let us see what was stated by the PRC Commission on Dearness Allowance in its report to Govt. Dearness Allowance is a compensatory allowance to neutralize the rise in the cost of living index.
- Several employees’ associations have requested for sanction of D.A. on par with Central Government employees and some of them, have requested for equal rate of D.A. on par with Central Government employees. The Government of India evolved their scales by merging Dearness Allowance as on 1.1.2006, with Basic Pay. We have, as is the practice in the State, recommended merging of Dearness Allowance in Basic Pay as on 1.7.2013.
- Since the Basic Pay has been worked out by us by merging Dearness Allowance at a higher level than the Government of India, the rate of Dearness Allowance sanctioned to the employees of the Government of India cannot be adopted directly in respect of the employees of the State Government. For this purpose, the State Pay Revision Commissioners have been recommending a conversion formula, to ensure that the quantum of Dearness Allowance sanctioned is at par with what is sanctioned by the Centre.
- Accordingly, this Commission recommends that Dearness Allowance be regulated at 0.524% (536:1022) for the State Government Employees for every 1% of Dearness Allowance sanctioned to the employees of Government of India With effect from 1.1.2014.
Whether 0.524% DA Ratio PRC 2015 recommendation gain or loss ?
After studying the recommendation let us see how to calculate the difference in DA Ratio as per the present and PRC Recommendation.
- Let us assume that Your Basic is at Rs.100 on 1.7.2013 i.e., on the PRC 2015 date.
- DA on 1.7.2013 is 63.344%, hence your New basic after merging the DA in your Old basic of Rs.100 will be Rs.100 + 63.344 = Rs.163.344. For details see the table below.
|Description||In Old Pay (Present)||In New PRC||Explanation|
|Basic as on 1.7.13||100||163.344||DA on 1/7/13 merged to Basic|
|% of DA to every 1% of Central DA||0.856||0.524|
|10% Central DA announced w.e.f 1.1.14||8.56% (10 x 0.856)||5.24% (10 x 0.524)||10% value|
|Total Value of 10% DA||100 x (8.56 /100) = 8.56||163.344 x (5.24 / 100) = 8.559||Both have the same value hike|
|7 % Central DA announced w.e.f 1.7.14||(7 x 0.856) =5.992 %||( 7 x 0.524) = 3.668%||7% value|
|Total Value of 7% DA||100 x (5.992 /100) = 5.992||163.344 x (3.688/100) = 6.02||Both Equal New Pay DA slightly high|
|Total DA Hike 17% ( from Jan-Dec 2014 )||17 x 0.856 = 14.552||17 x 0.524 = 8.908||17% Value|
|DA Hike Value in Rs.||100 x 14.552 / 100 = 14.55||163.344 x 8.908 / 100 = 14.55||Same Values|
- From the above examples it is very much clear that there is NO LOSS on fixing the DA Ratio at 0.524%, more over it will be a gain as the 43% fitment is also going to be added to the Basic as on 1.7.13.
- Hence there is NO Loss or Gain at present.
Is it a point to be discussed ?. When Central Govt announces its PRC, then the State Govt may also change its Ratio basing on the situations and calculations at that time. It is out of the topic to discuss this matter at present as the Central PRC will be announced after 2 Years.
- So what is your opinion... Is 0.524% DA Ratio recommendation by PRC 2015 Gain or Loss ?. Let us know, if we have missed any thing in doing calculations..Do comment...