How much your salary will increase? 7th Pay Commission: Cabinet approves 28% DA hike.

New Delhi, India: For a long time, more than 1.2 crore central employees and retirees have awaited the restoration of higher Dearness Allowance (DA) and Dearness Relief (DR). However, after a cabinet meeting led by Prime Minister Narendra Modi on Wednesday, the Central government allegedly decided to restore the increase in the allowance (July 14).

Employees in the central government currently receive a 17 percent dearness allowance. According to a report by ZeeNews Hindi, employees will now receive a DA of 28% of their basic income.

The central government has finally decided on the delayed dearness allowance and dearness relief hike for central government employees and pensioners. After nearly a year, the Union Cabinet has authorized the pending DA and DR increases.

The news comes as a huge relief to the thousands of central government employees and retirees who have been waiting months for the announcement.

The move follows various media stories suggesting that the Seventh Central Pay Commission (7th CPC dearness )'s allowance and dearness alleviation perks would be restored in July. From July 1, 2021, the DA and DR rise advantages will be in effect. The government is anticipated to spend around Rs 34,400 crore on the move.

According to an earlier article, the employees may have to wait a long time to receive the increased DA because multiple permissions are necessary. Employees in the federal government are anticipated to get arrears beginning July 1, 2021, if there is a delay.

Before the raise was agreed by the cabinet, at least three DA installments were due — two from last year and one from this year (01.01.2020, 01.07.2020, and 01.01.2021). As part of the three outstanding installments, an 11% DA increase has been authorized.

How do you calculate the increase in DA?

The dearness allowance has previously been enhanced by 4% in January 2020, 3% in June 2020, and 4% in January 2021 by the central government. According to the calculations, the overall increase will be 28% (17+4 +3+4).

“Three further installments of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners, which were due from 01.01.2020, 01.07.2020, and 01.01.2021, had been frozen due to the unusual situation that emerged as a result of the COVID-19 epidemic.

With effect from July 1, 2021, the government has decided to increase the Dearness Allowance for Central Government employees and Dearness Relief for pensioners to 28 percent, an increase of 11 percent over the current rate of 17 percent of the Basic Pay/Pension,” the Ministry of Finance said in a statement.

So, if an employee gets Rs 20,000 per month in basic income, their salary will grow by 11%, or Rs 2200. You can compute your salary increase based on your basic pay in the same way.

There will be no decision on the DA rise in July 2021.

“The increase includes the additional installments due on January 1, 2020, July 1, 2020, and January 1, 2021. For the period 01.01.2020 to 30.06.2021, the Dearness Allowance/Dearness Relief rate will stay at 17 percent,” it stated.

The All India Consumer Price Index numbers for May 2021 were previously released by the Ministry of Labor. The May 2021 index increased by 0.5 points, bringing it to 120.6. For those unfamiliar, the index must be over 130 for DA to grow by 4%. The data for June is still pending.

Also read: In June, wholesale inflation fell to 12.07 percent as food and crude oil prices fell.

Highlights

Employees in the central government currently receive a 17 percent dearness allowance.

Employees will now receive a DA and DR at a rate of 28% of their basic pay.

The All India Consumer Price Index numbers for May 2021 were previously released by the Ministry of Labor.