7th Pay Commission: In what comes as a piece of news to cheer for central government employees, the government may announce a hike in Dearness Allowance (DA) by the end of this month, which will lead to a big jump in their salary.
More than 1 crore central employees and pensioners will be benefited from the government announcement expected by the month-end, Zee News reported. It is believed that the government may transfer the money of the increased DA hike and arrears of the last two months along with the March salary. An increase in 3 per cent DA means that the total DA of Central government employees will be 34 per cent. It means a Central government employee with a basic salary of Rs 18,000 will receive an annual dearness allowance of Rs 73,440. If the dearness allowance is increased to 34 per cent, then the salary will come from Rs 73,440 to Rs 2,32,152 20 thousand.
What is DA and What we Know so Far?
Dearness Allowance is a component of the salary of government employees and pensioners. To cope with the rising inflation, the central government revises DA and DR benefits twice every year – in January and July. DA varies from employee to employee based on whether they work in the urban sector, semi-urban sector, or the rural sector.
The government’s last move had benefitted early 48 lakh central government employees and 65 lakh pensioners across India when it hiked DA in October.
As of now, central government employees are paid a Dearness Allowance of 31 per cent. The most recent hikes were given in July and October 2021, after a months-long freeze in the allowance due to the Covid-19 pandemic. The Union Cabinet in October had hiked dearness allowance and dearness relief by 3 per cent to 31 per cent to benefit 47.14 lakh Central Government employees and 68.62 lakh pensioners.
DA Hike of 3 per cent Expected
According to media reports, the central government can announce to increase DA by 3 per cent. A hike of 3 per cent could lead to an increase in salaries of government employees by up to Rs 20,000. Under the 7th Central Pay Commission, the DA of government employees is calculated on the basis of basic pay. The current DA rate stands at 31 per cent, after a hike of 3 per cent in October and 11 per cent in July.
The announcement of hike in dearness allowance (DA) can be done by the end of March. The DA was increased by 3 per cent in January 2022, taking the total DA to the employees from 31 per cent to 34 per cent. As per AICPI data, DA has reached 34.04 per cent till December 2021. The DA on the basic pay of Rs 18,000 after 3per cent increase in allowances will be Rs 73,440 per annum.
Calculation on Minimum & Maximum Basic Salary
If Basic Salary of Employee is Rs 18,000
– New DA (34 per cent ) Rs 6120/month
– DA so far (31 per cent ) Rs 5580/month
– How much dearness allowance increased 6120- 5580 = Rs 540/month
– Increase in annual salary 540X12 = Rs 6,480
If Basic Salary of the Employee is Rs 56900
– New DA (34 per cent ) Rs 19346 / month
– DA so far (31 per cent) Rs 17639 / month
– How much dearness allowance increased 19346-17639 = 1,707 Rs/month
– Increase in annual salary 1,707 X12 = Rs 20,484
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