Press "Enter" to skip to content

Central Govt Employees: Big Jump in Salary as Centre Increases DA to 28%. Know DA Arrear, Rule

7th Pay Commission: To provide some relief to central government employees and pensioners amid the rising inflation and Covid-19 pandemic, the central government on Wednesday announced to increase Dearness Allowance (DA) and Dearness Relief (DR). The Cabinet Committee on Economic Affairs (CCEA) hiked dearness allowance to 28 per cent. The new rate will be effective from July 1, 2021. Nearly 50 lakh employees will be benefitted from the decision.

In the light of coronavirus pandemic in the country, the Centre put a hold on the dearness allowance of the central government employees last year. The employees and pensioners have not received any DA arrears from January 1, 2020 to June 30, 2021. It was earlier mentioned that any hike in DA due to revision on July 1, 2021, will take into account the previous hikes as well.

“Last year, the Central Government had taken a decision to suspend disbursement of DA in order to save funds for dealing with the medical emergencies due to the pandemic. The hike in the DA will come as a relief and serve as a financial boost to both, serving government employees as well as pensioners,” said Amrita Tonk, partner, L&L Partners.

DA Hike Calculation: 

The central government employees and pensioners has been receiving 17 per cent DA since July, 2019. The dearness allowance has been raised by 4 per cent in January 2020, by 3 per cent in June 2020 and by 4 per cent in January this year. With the pending hike, the DA for central government will increase to 28 per cent, applicable from July.

Dearness Allowance is a component of salary of government employees and pensioners, aimed at soothing the impact of inflation. The Centre revises DA twice every year – in January and July. It is to help the employees and pensioners to cope up with the rising inflation. As DA is related to cost of living, it varies from employee to employee based on whether they work in urban sector, semi-urban sector or the rural sector.

DA is divided into two categories — industrial dearness allowance (IDA) and variable dearness allowance (VDA). The industrial dearness allowance depends on the Consumer Price Index (CPI) and is revised quarterly. It is applicable for the public sector employees of the central government. The variable dearness is applicable for central government employees.

The Union government is likely to restore the 7th pay commission Dearness Allowance and Dearness Relief benefits by September now, according to media reports. The retail inflation dropped to 6.26 per cent in the month of June. Consumer Price Index inflation was over the Reserve Bank of India’s (RBI) threshold of 6 per cent for the second straight month. The wholesale price-based inflation eased marginally to 12.07 per cent in June.

Read all the Latest News, Breaking News and Coronavirus News here

Source: News18