8th Pay Commission: Merge DA With Basic Salary, Combine Unviable Pay Scales, NC-JCM Tells DoPT

In a meeting called by the Department of Personnel and Training, the National Council of Joint Consultative Machinery demanded the merger of dearness allowance with the basic salaries of central government employees, before the 8th Pay Commission is implemented.

The NC-JCM—an official body comprising bureaucrats and employee union leaders—held a meeting with DoPT Secretary Rachna Shah on Monday. During the meeting, it was pointed out that DA, which is aimed at offsetting the impact of inflation, has already crossed 50%.

Following the last revision in October, the DA has increased to 53%. The time has come to merge the DA with basic salary to provide relief to employees, said Shiv Gopal Mishra, NC-JCM secretary (staff side) and All India Railwaymen's Federation chief, while speaking to NDTV Profit on Tuesday. "The merger should be done immediately," he said.

Similarly, the staff side of NC-JCM has also demanded the merger of dearness relief with the basic pension, he added. The DR, in line with DA, currently stands at 53% of the basic pension.

Notably, under the 5th Pay Commission—which lasted from 1996 to 2006—the norm was to merge the basic pay with DA, once the key allowance crosses 50%. Accordingly, the government had integrated DA with basic salary in 2004.

However, the 6th Pay Commission—implemented from 2006 to 2016—had discontinued this rule. The 7th Pay Commission had proposed its restoration, but the government had not accepted it back then, Mishra said.

Another key demand raised in the meeting was that "unviable pay scales should be merged", Mishra noted. The staff side of NC-JCM has sought the merger of pay scale level 1 with level 2, level 3 with level 4, and level 5 with level 6, he explained.

"This is important to address as non-viable pay scales lead to pay stagnation, and thereby affect MACP (Modified Assured Career Progression Scheme)," the AIRF general secretary said.

On being asked about the DoPT Secretary's response to these demands, Mishra said, "This was a consultation meeting with regards to the terms of reference for the 8th Pay Commission. The DoPT Secretary took note of our concerns, and we expect her to present the same before the Finance Ministry."

The amalgamation of DA with basic pay will raise the basic salaries, which could result in a sharper hike when the 8th Pay Commission is implemented.

The pay commissions generally propose a fitment factor, which is used as a multiplier to raise the basic salaries. The 7th Pay Commission had recommended a fitment factor of 2.57, which raised the minimum salary in 2016 from Rs 7,000 to Rs 18,000 (Rs 7,000 x 2.57).

If no changes are made to the current pay structure, then the fitment factor to be recommended by the 8th Pay Commission will be multiplied with Rs 18,000 to determine the new minimum salary.

However, if DA is immediately merged with basic pay, then the basic salary would increase. Since the DA currently stands at 53%, amalgamating it with basic pay can raise the entry-level minimum salary to Rs 27,540.

As a result, when the 8th Pay Commission will recommend a fitment factor, it will be applied on the new base salary — Rs 27,540 in this case, instead of Rs 18,000. However, this scenario may not hold true if the 8th Pay Commission recommends to determine the new wages by multiplying the fitment factor with the basic salaries as fixed by the 7th Pay Commission in 2016.

In an earlier conversation with NDTV Profit, representatives of two employee forums said they expect the 8th Pay Commission to recommend a subsequent revision in basic pay if the DA crosses 50%.

"This was proposed by the 7th Pay Commission. But, it was not part of the final list of recommendations approved by the government. However, we expect the 8th Pay Commission to recommend the same," an official of the Confederation of Central Government Employees and Workers had said.

Similar views were echoed by Mishra, who had told this publication that "we will certainly raise this demand before the 8th Pay Commission."

Notably, the 8th Pay Commission's formation received the Union Cabinet's nod last month. On being asked about the appointment of its chairman and members, the finance ministry told the Parliament on Feb. 4 that the decision will be taken in "due course".