7th Pay Commission: After a gap of almost one-and-half year, the central government has raised the Dearness Allowance (DA) and Dearness Relief (DR) for central government employees and pensioners. The dearness allowance and dearness relief have been hiked to 28 per cent from the existing 17 per cent. The new rate will be effective from July 1.
To fight against nationwide coronavirus pandemic, the central government halted the dearness allowance benefits for employees till June 30, 2021. The finance ministry earlier mentioned that any hike in DA due to revision on July 1, 2021, will take into account the previous hikes as well.
Nearly 48 lakh central government employees and 65 lakh pensioners will be benefitted by this latest move. It will cost the government an additional Rs 34,401 crore.
All you need to know about DA hike, DA arrears and salary calculation:
1) The government has restored three installments of dearness allowance and dearness benefits which fell due in last one and half year — 4 per cent on January 1, 2020, 3% per cent on July 1, 2020, and 4 per cent on January 1, 2021.
2) Dearness Allowance is a component of salary of government employees and pensioners. To cope up with the rising inflation, the central government revises DA and DR benefits twice every year – in January and July. DA varies from employee to employee based on whether they work in urban sector, semi-urban sector or the rural sector.
3) The central government employees has received 17 per cent DA till June 30, 2021. Now the DA has been revised to 28%, starting from July 1, 2021. If a government employee gets Rs 18,000 per month, his or her take-home salary will be increased 11 per cent or by Rs 5,040 from July.
4) It must be noted that that government will not pay any dearness allowance arrears for the period between January 1, 2020 to June 30, 2021. “#Cabinet approves restoring of three instalments of Dearness Allowance and Dearness Relief with effect from 01.07.2021 representing an increase of 11% over the existing rate of 17% of the Basic Pay/Pension. No arrears for the period from 01.01.2020 till 30.06.2021 shall be paid," said Jaideep Bhatnagar, principal spokesperson, government of India and principal director general of Press Information Bureau.
5) “The increase reflects the additional instalments arising on 01.01.2020, 01.07.2020 and 01.01.2021, which were earlier frozen due to covid pandemic situation. The rate of DA/DR for the period 01.01.2020 to 30.06.2021 shall remain at 17%," explained Subodh Sadana, partner, AnantLaw.