In an important update for Central Government employees, the Centre has officially merged Dearness Allowance (DA) with basic pay. However, contrary to expectations, there has been no increase in the fitment factor. While the merger simplifies salary calculations and boosts allowances slightly, the absence of a fitment factor hike has left many employees disappointed.
Here’s a detailed breakdown of what the DA merger means for lakhs of government employees and pensioners.
Understanding the DA Merger
Dearness Allowance is a cost-of-living adjustment provided to government employees and pensioners. When DA crosses a certain threshold, usually 50%, it is merged into the basic pay.
Key Points:
- DA has been merged after reaching 50%.
- Basic pay structure has been revised accordingly.
- Future DA hikes will now restart from 0%.
- No increase in fitment factor, meaning no substantial hike beyond the DA adjustment.
What is the Fitment Factor and Why is it Important?
The fitment factor is used to calculate the revised salary by multiplying the basic pay.
| Particulars | Previous Scenario | Current Update |
|---|---|---|
| DA Before Merger | 50% | Merged with Basic Pay |
| Fitment Factor | 2.57 | Remains 2.57 |
| Employees’ Expectation | 3.68 Fitment Factor | Not Fulfilled |
| Salary Increase Type | Only DA-based adjustment | No new fitment hike |
| Effective Timeline | Post DA Merger Notification | Already Applicable |
| Impact on Pensioners | Only DA Merger Benefit | No extra hike through fitment |
Quick Facts:
- Current Fitment Factor: 2.57 times basic pay
- Employees’ Demand: 3.68 times
- Government Decision: No change; remains 2.57
Impact on Central Government Employees
The immediate effects of the DA merger without a fitment factor hike include:
- Minor salary increase due to recalculated allowances like HRA, TA, etc.
- Pension adjustments aligning with the new basic pay.
- Future increments calculated from the revised base salary.
- No major salary jump employees were expecting through a fitment factor revision.
Expectations vs Reality: A Comparison
| Factor | Employees’ Expectation | Actual Outcome |
|---|---|---|
| DA Merger | Yes | Yes |
| Fitment Factor Hike | From 2.57 to 3.68 | No change, remains 2.57 |
| Salary Jump Expected | 40%-50% hike | Only DA-linked adjustment |
| Implementation Timeline | Immediate after merger | Immediate but limited impact |
| Future Pay Commission | Possible Fitment Revision | No announcement yet |
Why No Fitment Factor Hike?
Several possible reasons contributed to the government’s cautious move:
- High financial burden on government finances.
- Inflation control and economic stability measures.
- Upcoming general elections requiring prudent financial management.
- Likely reservation of major salary reforms for the 8th Pay Commission.
Future Outlook for Central Employees
While the current development offers partial relief, employees can look forward to future revisions:
| Event | Expected Time | Notes |
|---|---|---|
| Next DA Hike | July 2025 | Based on AICPI trends |
| 8th Pay Commission Setup | 2026-27 | Post general elections |
| Fitment Factor Revision | Post-2027 | Possible after Pay Commission report |
| Allowances Revision | Annually | Based on new pay matrix |
Employee Reactions
- Many employee unions welcomed the DA merger.
- Strong disappointment expressed over the lack of a fitment factor hike.
- Some unions planning protests and submitting memoranda to the government.
- Hope persists that future reforms will address salary structure demands.
Conclusion
While the DA merger with basic pay is a positive step, the absence of a fitment factor hike has dampened enthusiasm among Central Government employees and pensioners. The government’s decision reflects a balancing act between employee welfare and financial discipline. As discussions around the 8th Pay Commission pick up pace, employees remain cautiously optimistic about future reforms that could finally address long-pending demands for a substantial salary hike.
Employees are advised to monitor official notifications and stay engaged with staff associations for the latest developments.
FAQs
What has been announced regarding the DA merger?
The government has merged Dearness Allowance with basic pay but did not announce any fitment factor increase.
What is the current fitment factor after the DA merger?
The fitment factor remains unchanged at 2.57 times the basic pay.
Will employees get a salary hike after the DA merger?
Yes, a minor hike through allowances recalculated on the new basic pay will occur, but there is no major hike due to no fitment factor change.
Is the 8th Pay Commission expected to revise the fitment factor?
It is likely that the 8th Pay Commission will address fitment factor revisions, expected after 2026–27.
When is the next DA hike scheduled?
The next DA revision is expected in July 2025 based on AICPI data.