7th Pay Commission: The Centre is likely to announce a big update on Dearness Allowance (DA) and Dearness Relief (DR) for the central government employees and pensioners on Wednesday. The Cabinet Committee on Economic Affairs (CCEA) may approve 3 per cent DA hike for the month of July, sources told News18.
At present, the central government employees get a dearness allowance of 17 per cent. The current rate has been effective since July, 2019. In the wake of coronavirus outbreak in the country, the Central stalled the hike in dearness allowance last year. The finance ministry stated that no arrears will be paid from January 1, 2020 to June 30, 2021. However, any hike in DA due to revision on July 1, 2021, will take into account the previous hikes as well.
The dearness allowance of the central government employees has been raised by 4 per cent in January 2020, by 3 per cent in June 2020 and by 4 per cent in January this year. With an increase of 3 per cent in July and the pending hike, the DA for central government likely to jump to nearly 31 per cent.
A Dearness Allowance (DA) is a sum paid to central government employees and pensioners, in an attempt to offset the rising inflation in the country. Inflation drives prices at different rates across the country, depending on the location. Therefore, based on the location of the employee and the rate of inflation at that time of the year, the DA is calculated accordingly.
DA has been included to compensate for price rise or inflation in a particular financial year since 1996. It is revised twice every year – in January and July.
Last month, there have been reports that the Centre will restore the DA for central government employees, starting from July. However, the finance ministry later clarified that they had not taken any decision regarding DA restoration. “A document is doing rounds on social media claiming resumption of DA to Central Government employees and Dearness Relief to Central Government pensioners from July 2021. This OM is fake and no such OM has been issued by GOI," ministry of finance wrote on Twitter last month.
The Union government is likely to restore the 7th pay commission Dearness Allowance and Dearness Relief benefits by September now, according to media reports.
The retail inflation dropped to 6.26 per cent in the month of June, according to the data released by the Ministry of Statistics & Programme Implementation (MoSPI) on Monday. The inflation stayed over and above the Reserve Bank of India’s (RBI) threshold of 6 per cent for the second straight month. Food inflation increased to 5.15 per cent in June from 5.01 per cent in May. Inflation based on Consumer Price Index (CPI) remained high due to surge in petrol, diesel prices and costlier food items.