Pending for more than one and a half years due to the pandemic, the hike in dearness allowance (DA) for central government employees and pensioners has been approved under the seventh pay commission. The hike is applicable from July 1, 2021.
The decision was taken in a cabinet meeting chaired by Prime Minister Narendra Modi.
According to the latest order, the central government employees will now get the dearness allowance (DA) at the rate of 28 percent, a hike of 11 percent from earlier 17 percent. The decision will benefit around 1.14 crore employees and pensioners, said Anurag Thakur, Union minister for information and broadcasting.
The hike is expected to cost the government an additional Rs 34,400 crore (approximately). The Centre has clarified that there will be no arrears for the period of January 2020-June 2021.
The DA has been increased by 11 percent as three hikes were kept frozen due to the pandemic. The central government had earlier increased the dearness allowance by 4 percent in January 2020, 3 percent in June 2020, and 4 percent in January 2021
It was also said that a 21 percent DA hike will be applicable retrospectively from January 2020. But the implementation was stalled and central government employees continued to get their 17 percent DA.
As the DA was not revised in July 2020 and January 2021, the 28 percent hike takes into account all these revisions that could not be done.
How to calculate your hike?
DA is calculated on the basic salary of an employee. Till now, the central government employees were getting a 17 percent dearness allowance. So, if an individual had a basic salary of Rs 10,000, he was pocketing a DA of Rs 1,700. Now, the DA has been raised to 28 percent, hence, the same individual will now be getting Rs 2,800 (28 percent of Rs 10,000) as DA.
The DA is a sum paid to an employee (or pensioner) to help him/her cope up with the rising inflation in the country. It is revised twice every year — once in January and once in July.