DA of central employees to jump to 28%! Increased salary will come into account from July 1?

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.

Over 50 lakh central government employees and more than 65 lakh pensioners, eagerly waiting for the implementation of hike in Dearness Allowance may see a hike of upto 28 percent from 17 percent in the month of July. 

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.

Minister of State for Finance, Anurag Thakur had in March this year told Parliament that the employees will get full benefits of dearness allowance starting July 1 and all the three pending installments will be restored prospectively. However, what may upset the central government employees is that any increase in DA from July 1 will only be effective from that day, which means that the employees would not get any arrears on non-revision of DA for previous period.

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.”

As per some reports available in the media, the central government employees must keep in mind 7th CPC Fitment Factor of 2.57 while calculating the probable hike in monthly salary. This means as per the 7th Pay Commission Fitment Factor, if an employee draws a monthly basic salary of Rs 21,000 then one’s monthly 7th CPC salary hike will be Rs 51,400 (Rs 20,000 x 2.57).

At present, central government employees get DA of 17 per cent. This level of DA became effective from July 2019 with further revision due from January 2020. But this along with subsequent two other revisions were suspended due to Covid. Last year, the Union Cabinet had approved a 4 per cent increase in DA for government employees and pensioners to 21 per cent. This was to be effective from January 1, 2020. However, in wake of the pandemic the disbursement of DA at increased rates was suspended along with DR for the pensioners.