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Sunday 24 January 2021

7th Pay Commission: DA to jump by 28%, increased salary in the account by July 1?

7th Pay Commission: DA to jump by 28%, increased salary in the account by July 1?

More than 50 lakh central government employees and over 65 lakh pensioners across India are waiting for the hike in Dearness Allowance (DA) and it is expected that they may see a DA hike of upto 28 percent from 17 percent in July.

1. DA hike

According to the All India Consumer Price Index (AICPI), DA of central government employees can be increased by 4 percent. The AICPI report also mention that after the DA is reinstated, the Dearness Allowance of the central employees may increase from 17 percent to 28 percent. This includes a 3 percent increase in DA from January to June 2020, a 4 percent increase from July to December 2020, and a 4 percent increase from January to June 2021. The total DA calculation will then come to (17 + 4 + 3 + 4) 28 percent.

2. Centre on DA

In March, Minister of State for Finance, Anurag Thakur, told Parliament that all Central government employees will get full benefits of DA starting July 1. He had also said that all the three pending installments will be restored prospectively.

3. Arrears of Central government employees

New Delhi 7th Pay Commission. The central government has given very good news to millions of central employees of the country. The government has increased the Dearness Allowance (DA) of employees. This decision of the government will benefit about 50 lakh central employees and 61 lakh pensioners. Although it has not been officially confirmed, media reports have claimed that employees will start receiving salaries from January onwards with increased DA.

Any increase in DA from July 1 will only be effective from that day, which means the Central government employees are set to miss their arrears.

4. Reason behind DA freeze

The three installments of DA due on January 1, 2020, July 1, 2020 and January 1, 2021, were frozen in view of the COVID-19 pandemic. In a written reply to the Rajya Sabha, Thakur said: "As and when the decision to release the future installments of Dearness Allowance due from 01.07.2021 is taken, the rates of DA as effective from 01.01.2020, 01.07.2020 and 01.01. 2021 will be restored prospectively and will be subsumed in the cumulative revised rates effective from 01.07.2021."

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5. Salary increase

The Central government employees should keep in mind 7th CPC Fitment Factor of 2.57 while calculating the probable hike in monthly salary.

According to media reports, the dearness allowance of employees has been increased by four percent. Now the DA of employees will increase from 17% to 21%. It is worth noting that central government employees and pensioners are eagerly waiting for this official announcement of the government. In March 2020, the Union Cabinet approved the release of Dearness Allowance for employees and pensioners and an additional installment of Dearness Relief from January 1, 2020.

7th Pay Commission 4% increase in DA increased salary from January

Then Finance Minister Nirmala Sitharaman had said that the existing dearness allowance in basic salary/pension would be increased by 4%, but due to the Corona epidemic crisis, the allowances to employees and pensioners were banned from 1 January 2020. The government had issued a notice by the Department of Expenditure stating that the next installment of allowances from 1 July 2020 and 1 January 2021 would not be given, but then DA, DR would continue to be paid at current rates.

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