7th Pay Commission: Govt Employees Who Will Get Hike in DA, HRA From August 2021- Know All Details Here
New Delhi: Finance Ministry has recently issued an order to implement the Union Cabinet decision to hike Dearness Allowance (DA) for central government employees from July 1. After over one-and-half-year, the Union government has increased the Dearness Allowance and Dearness Relief (DR) of central government employees and pensioners. The move comes at a time when retail inflation has remained over 6 per cent for the two straight months. The surge in allowance will help millions of beneficiaries to cope up with rising food and oil prices amid coronavirus pandemic.
7th Pay Commission: Apart from the Central government employees, Railways employees and Armed Forces personnel, the Centre has also announced a hike in Dearness Allowance for the employees in the Department of Post and Central Public Sector Enterprises (CPSEs). The employees of these departments, who were waiting for long time for the hike, will surely be happy now after getting this news. The move from the Centre will benefit lakhs of employees working in these departments under the Modi government. As per latest reports, their salary will increase from August as the employees working in these two departments will get the benefit of the increase in HRA along with the increase in Dearness Allowance (DA).
Let’s also take a look at the recent changes that central government employees must know
1) To provide some relief amid coronavirus pandemic, the Union government has surged the dearness allowance to 28 per cent from 17 per cent. The central government employees have been receiving 17 per cent DA since July, 2019. The Central stalled DA last year in the wake of coronavirus pandemic.
2) The revised DA will be come into effect from July, 2021. A central government employee who gets Rs 18,000 per month, will see a hike of 11 per cent in his take-home salary. His salary will jump by Rs 5,040 from July. The Dearness Allowance from January 1, 2020 to June 30, 2021 will remain 17 per cent for government employees. There will be no DA arrears for the mentioned period.
3)”The DA payable to central government employees shall be enhanced from the existing rate of 17 per cent to 28 per cent of basic pay. The increase subsumes the additional instalments arising on January 1, 2020; July 1, 2020, and January 1, 2021,” said the department of expenditure under the finance ministry.
4) As the dearness allowance is linked to the basic salary, a hike in DA will also raise the monthly provident fund (PF) and gratuity amount of the central government employees. So, PF, Travel Allowance and gratuity will go up for the employees and the pensioners.
5) Commenting on Centre’s decision to raise dearness allowance of the central government employees, Sajai Singh, Partner, J Sagar Associates, said, “This is a welcome move since coronavirus has really shaken the economic foundation of the country and DA is paid to offset inflation. Inflation affects the price of everything and it’s impact may vary marginally from location to location, so hopefully this jump will bring relief to the beneficiaries.”‘
Last week, the Union Cabinet had approved an 11 per cent hike in Dearness Allowance (DA) and Dearness Relief (DR) for central government employees and pensioners with effect from July 1, benefitting more than 48 lakh central government employees, and 65 lakh pensioners. With this, the new DA rate will be 28 per cent, up from 17 per cent.
DA hike calculation
At present, the government employees are getting a 17% DA. For example, if a government employee’s basic salary is ₹18,000, the DA is ₹3,060. With 28%, the dearness allowance will be 5,040 in a month. This calculation will be applicable from July 1.
Dearness Allowance is a component of the salary that cushions against inflation and is revised twice a year – once in January and once in July.
In April last year, the Finance Ministry had put on hold an increment in dearness allowance (DA) till June 30, 2021, due to the COVID-19 pandemic. The rate of DA from January 1, 2020, to June 30, 2021, was 17 per cent.
(With Inputs From Agencies)