7th Pay Commission (DA Hike Impact): Central Govt Employees to get 31% of Basic Pay as Dearness Allowance!

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7th Pay Commission (Dearness Allowance Hike Impact) Latest News Today: Ahead of Diwali and other festivals, the Central Government has announced an increase in Dearness Allowance and Dearness Relief for Central Government Employees and Pensioners respectively. The rate sof DA and DR for employees and pensioners have been increased by 3% if the Basic Pay/Pension.

The DA hike is expected to help the employees and pensioners in facing the rising inflation.

“The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, today has approved to release an additional instalment of Dearness Allowance to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 1.7.2021 representing an increase of 3% over the existing rate of 28% of the Basic Pay / Pension, to compensate for price rise,” the Union Cabinet said in a statement on Thursday 9 October 21st, 2021). .

“This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission. The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be Rs.9,488.70 crore per annum,” it added.

The decision to increase DA and DR rates will benefit about 47.14 lakh Central Government employees and 68.62 lakh pensioners.

Impact

Earlier in July this year, the Central Government had hiked DA and DR for both government employees and pensioners by11 percentage points to 28% of basic pay/pension.

Now, the DA of Central Government Employees will be calculated at the rate of 31% of Basic pay. Let us understand the impact of latest DA hike with an example:

Suppose the Basic Pay of a Central Government employee is Rs 40,000/month. As per the revised rate, he will now get 31% of Rs 40,000 as DA, i.e. equal to Rs 12,400.

As per the previous rate of 28%, he was getting Rs 11,200 as DA.

So, with the latest DA hike, this employee will now get Rs 1200 more (Rs 12400-Rs 11,200) cash in hand in lieu of DA than what he was getting earlier.

Last year, the Government had frozen DA hikes for employees and DR hike for pensioners due to the unprecedented situation created by the Covid-19 pandemic.