Cabinet approves merger of industrial dearness allowance's portion with basic pay

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New Delhi, Jan 30 : The Union Cabinet today gave its approval to merging a portion of Industrial Dearness Allowance (IDA) equalling 50 per cent of the existing basic pay of public sector employees with their basic pay with effect from January 1 last year.

The Cabinet took this decision following IDA pattern of pay scales at 1997 levels and that will be shown distinctly as Dearness Pay (DP) which would be counted for purposes like payment of allowances, transfer grant, retirement benefits, contribution to Contributory Provident Fund, various licence fees, various advances.

The Cabinet also approved extension of above decision to employees of Food Corporation of India, and approved determination of the entitlements for leave travel concession (LTC), travel allowance (TA) and dearness allowance (DA) while on tour and transfer on the basic pay alone without taking into account dearness pay.

The Board of Directors of each Central Public Sector Enterprises (CPSE) would consider the proposal for 50 per cent merger of DA with Basic Pay for executives and workmen keeping in mind the capacity of the company to pay and submit a proposal to the Administrative Ministry, which will approve the proposal with the concurrence of its Financial Advisor.

This would benefit the employees following IDA pattern of pay scales in CPSEs, which are in a position to absorb the additional expenditure without budgetary support.

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