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Friday, May 14, 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.

Central employees may soon receive good news amid the escalating transition period of the Corona epidemic. Last year, due to Corona, the government had withheld dearness allowance (DA) and dearness relief (DR) of employees and pensioners, which is all set to be released this time.

Increased salary will soon start coming in the accounts of millions of central employees and pensioners from July 1. The government has said in Parliament that their stalled dearness allowance (DA) and dearness relief (DR) will be resumed from 1 July 2021. The dearness allowance, which is currently available at the rate of 17 per cent, can be increased by 11 per cent, taking the total percentage hike to 28 percent straight. According to the All India Consumer Price Index (AICPI) data release, between January and June 2021, at least DA can be increased by 4 percent, media reports have said. The reports further 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. That means the total DA calculation will be (17 + 4 + 3 + 4) 28 percent.

The three installments of dearness allowance for central government employees and DR for pensioners, 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."

A few days ago, the central government had announced to increase the maximum limit of family pension for government pensioners. The central government has increased the maximum limit of family pension by almost two and a half times. Till now the maximum limit of family pension was Rs 45,000 per month. Now it has been increased to Rs 1.25 lakh per month.

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
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."

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.


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