The Central Government has made it clear that at present no plan is underway to merge the Dearness Allowance (DA) of central employees with the basic salary. Minister of State for Finance Pankaj Chaudhary said this in response to a question in the Lok Sabha. There was a demand from employee organizations for a long time that when DA reaches 50 percent, it should be added to the basic salary. But the government has put a brake on this for now.

This decision is important because DA has increased several times after the 7th Pay Commission. DA had increased to 50 per cent in July 2024, after which employees were hopeful that the merger could take place. But now the discussion about the Eighth Pay Commission is also gaining momentum, and the government wants to stop the speculation.

Why does this issue matter?

Around 50 lakh central employees and 65 lakh pensioners are directly affected by this decision. DA merger increases the basic pay, which also increases facilities like HRA, gratuity and pension. Experts believe that if the merger had taken place, the employees could have got an additional Rs 5,000 to Rs 15,000 per month in their pockets. But the government is cautious considering the budget burden.

Rumors spread about retired employees dismissed

Some posts on social media were claiming that retired employees will not get the benefit of DA increase or new pay commission in future. The government dismissed these rumors outright by posting on X (formerly Twitter). Pensioners will also continue to get DA under the existing rules.

What’s in the background?

Pay Commission is formed every 10 years. The 7th Commission came into force in 2016, so the 8th is expected in 2026. But the government has not made any official announcement yet. Employee unions say that in this era of inflation, a commission should be formed soon.

Fugitive criminals owe Rs 58,000 crore to banks

On a separate but serious issue, the government said that 15 fugitive economic criminals like Vijay Mallya, Nirav Modi have fled after defrauding banks of Rs 58,000 crore. Of these, 9 cases are to government banks. The Enforcement Directorate (ED) registered 6,312 cases in the last 11 years, but resulted in conviction in only 120 cases – a success rate of just 1.9 per cent.

What do experts say?

Banking experts believe that the process of confiscating the assets of fugitives should be expedited. So far some properties have been sold, but the recovery has been only 10-15 percent. The two fugitives have agreed to talk, which is a positive sign.

There is no plan to merge banks

The government clearly said that at present there is no proposal to merge public sector banks with each other. Many big mergers have taken place in the last few years – such as the merger of Oriental and United Bank into Punjab National Bank. Now the focus is on stability.

Foreign Investment and Rural Banks

The FDI limit is 20% in government banks and 74% in private banks. IDBI Bank disinvestment was approved in 2021, but the process is slow. The good news is that the financial condition of Regional Rural Banks (RRBs) has improved in the last 3-4 years – NPAs have declined and profits have increased.

Why is all this important?

These decisions not only affect the employees and banks, but also show the health of the economy. With low NPA and strong banking system, the common man gets cheap loans and better services.