UNDERSTANDING D.A. MERGER AND WAGE REVISION PROCESS!!

UNDERSTANDING D.A. MERGER AND WAGE REVISION PROCESS!!

In the meeting 12.08.2013 it is decided to merge 4440 points of CPI with Basic pay.

What does it mean?

As on 01.11.2011 CPI was 4440 for D.A calculation i.e 401 slabs, 60.15%(@0.15% per slab)
As on 01.11.2012 CPI was 4876 for D.A calculation i.e 510 slabs,      76.50% (@0.15% per slab)
Now after merging 4440 points D.A. for balance 436 points i.e 109 slab will remain.
This 109 slab will not be calculated @ 0.15% as it will lead to giving D.A on D.A +basic.
Hence it will be reduced.

To what extent?

In 8 th bi-partite settlement D.A. merger was at 2288 points. % per slab was 0.18%
In 9th bi-partite settlement D.A. merger was at 2836 points. % per slab was 0.15%

How 0.18 became 0.15?

It is simple maths.  (2288/2836)*0.18=0.145=0.15%

Likewise this time it will be (2836/4440)*0.15=0.0958=0.10%
This rate is not announced officially, but this is the method of calculation.

If higher % is announced it is a good news for us. Isn’t it?

What is the effect of merging D.A with Basic Pay?

Example: 

On 01.11.2012

Basic Pay =8000.

 D.A. (old) =6120 (@76.50%)                               

 Total        =14120

On 01.11.2012

Basic Pay  =12812. (160.15% of 8000)

D.A. (New)=1396.50(109*0.10%)

Total          =14208

Now, Basic pay of 8000 becomes 12812

.
IBA has not revealed the % of wage increase yet.

Any % announced will be calculated on 12812 and not on 8000.

This is the effect of D.A.merger.

All our benefits like  HRA, CCA, PF CONTRIBUTION, PENSION, COMMPUTATION,LOAN ELIGIBILITY etc.,are calculated on the basis of basic pay only. Hence we have to increase Basic pay substantially.
Therefore this merger point is a good one.

Effective date from 01.11.2012 and its importance:

In previous settlements effective date was postponed by an year or so and different heads like B.P, D.A., Spl.Allow, etc., was given effect on different dates thereby loosing the arrears substantially.

This time it is achieved from the day one.

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