7th Pay Commission: Central government employees are soon likely to get good news regarding their salaries, as the Centre is expected to revise the DA and fitment factor by the end of this month, according to media reports. The reports said the government employees’ minimum salary may see a rise from Rs 18,000 to Rs 26,000 after the hike in fitment factor. The DA is also likely to be increased by 4 percentage points to 42 per cent.
Update: Centre Approves 4% Dearness Allowance Hike for Central Govt Employees, Pensioners
The central government revises the DA and DR for employees based on a formula. Following is the formula:
Dearness Allowance Percentage = ((Average of All-India Consumer Price Index (Base Year 2001=100) for the past 12 months -115.76)/115.76)x100.
For Central public sector employees: Dearness Allowance Percentage = ((Average of All-India Consumer Price Index (Base Year 2001=100) for the past 3 months -126.33)/126.33)x100.
DA and DR are revised twice a year — January and July. Dearness allowance is given to government employees, while the dearness relief is for pensioners.
The average CPI-IW of the last 12 months is 372.2 currently. Following the formula, DA is coming to 42.37 per cent. So, the Union government is likely to increase the dearness allowance to 42 per cent on March 31, according to media reports.
The DA hike will be effective from January 1, 2023. Currently, over one crore central government employees and pensioners are getting 38 per cent dearness allowance.
Last revision in DA was done on September 28, 2022, which was effective from July 1, 2022. The Centre had increased DA by four percentage points to 38 per cent based on the percentage increase in 12 monthly average of All India Consumer Price Index for the period ending June, 2022.
The DA is provided to employees and pensioners to compensate them for rising prices.
18-Month DA Arrears
On the 18-month DA arrears, the Central government has clarified that it will not be “feasible" to release the 18-month dearness allowance (DA) arrears for the employees, which was stopped during the Covid-19 pandemic. The government had held back three installments of dearness allowance (DA) and dearness relief (DR) in view of the COVID-19 pandemic in 2020. Since this move, Central government employees and the pensioners have been waiting for an update on the pending arrears.
The common fitment factor currently stands at 2.57 per cent. It means that if somebody, let’s say, gets a basic pay of Rs 15,500 in 4200 Grade Pay, his total pay will be Rs 15,500×2.57 or Rs 39,835. The 6th CPC had recommended the fitment ratio at 1.86.
According to the reports, employees are now demanding the government to raise the fitment factor to 3.68. The hike will raise the minimum wage from Rs 18,000 currently to Rs 26,000.
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