Govt plans to merge DA to basic for PSUs

New Delhi: Government has mooted a proposal to merge Dearness Allowance paid to public sector employees with their basic salary, but it will have to wait till the appointment of a committee to review pay scales.

The Department of Public Enterprises has moved a note for consideration by the Union Cabinet, which is likely to discuss the issue next week, official sources told PTI.

However, the merger of DA with basic salary would be implemented only in those PSUs, which have the capacity to pay the enhanced amount. The Centre would not provide any additional funds for this purpose, they said.

The Government action comes in the backdrop of decision by employees of some of the biggest PSUs such as NTPC Ltd, Steel Authority of India Ltd, Coal India Ltd and National Hydroelectric Power Corporation to go on strike on September 12 if their demands, which includes DA merger, were not met.

Another proposal to constitute a commission to increase the pay scales of PSU employees has also been sent to the Prime Minister's Office for approval, sources said.

The PMO approval for the commission is likely to come within a month and the panel would be headed by a retired judge and comprise three more members.

Meanwhile, the notification for setting up the Sixth Pay Commission for Central Government employees is also expected in a day or two. Former Supreme Court judge Justice B N Srikrishna would head the Sixth Pay Commission that would include four other members.

The revision of pay scales would benefit more than 3.5 lakh employees of central PSUs.

The pay scales were last upgraded in 1999 on the basis of recommendations by Justice S Mohan committee that was set up in 1996 and its report came in 1998. The Cabinet accepted the suggestions of the panel in 1999, but the hikes were applicable from January 1997.

As this committee's reward was applicable for 10 years, a new committee has been necessitated.

The last wage revision had put an additional burden of Rs 2,000 crore per year on the Government and had doubled the basic pay scales of the executives and officers, while allowing for 100 per cent neutralisation of dearness allowance and enhanced city compensatory allowance.

The last wage increase brought the house rent allowance of the employees at par with Central Government employees and allowed for payment of allowances and perquisites up to a maximum of 50 per cent of basic pay.