DA & Allowances

Comrade,
               

              The Fifth Central Pay commission in its report vide para no105.10 has said that there is not much difference between the calculation of the 12 months average and 6 months average.

            Today we are demanding that point to point fixation or a three month average in Dearness Allowance formula, as we have worked out an net increase of 8  to 12 % additional DA to the Central Govt. Employees will get every month, compared to 12 months average if point to point fixation is taken or around 10% increase if three months average is taken into account. instead of 100% DA as on 1/1/2014 it would have been 112% DA. Right from the year 1996 to 2014 there would have an increased DA every month had 5th CPC accepted our demand for three months average.  Hence the statement of 5th CPC is wrong at this present circumstances. Our demand of point to point fixation or three months average is justified.    

Consumer Price Index.

   Please refer the recommendations of the 4th CPC on CPI . The Fourth CPC had recommended the formulation of a suitable consumer price   index based on the consumption pattern of "Government Employees" as a solution. The 6th CPC has also recommended separate index for Central Government Employees. 

Recommendation of 6th CPC vide para no 4.1.13

The Commission is of the view that the National Statistical Commission may be asked to explore the possibility of a specific survey covering Government employees exclusively, so as to construct a consumption basket representative of Government employees and formulate a separate index. Meanwhile, the Government may continue to use the AICPI (IW) for estimating the DA.

As a result of non  implementation of these recommendations we can observe that prices have increased by over 200%, but DA we are getting only 100%.

Exemption of Tax For All Allowances:   

   Further the  Fifth Central Pay commission in its report vide para no105.12 has said that  Dearness allowance should be paid free of net taxes as the DA is paid for compensation against price rise. The all allowances should also be paid net of taxes which has been examined by 5th CPC in para no 167. The demand of COC Karnataka was supported by the 5th CPC, that all allowances should not be taxed.   

 Para No I05.12 of the 5th CPC report "Regarding the exemption  of Dearness Allowance from tax, we propose that in line with our general recommendation  on giving all allowances net of income tax, dearness Allowance (including Dearness Pay referred to in the last paragraph) should be paid net of tax".

Para 167.10  of the 5th CPC report.

"Accordingly,we recommend  that all the allowances of Central Government employees, including those of various union territories,  may henceforth  be paid  net of taxes".

Comradely yours

(P.S.Prasad)
General Secretary 

Also see 7th CPC Work Paper click here