The central government is likely to restore the 7th pay commission Dearness Allowance (DA) and Dearness Relief (DR) benefits for the central government employees and pensioners soon. There has been reports that the Union Cabinet might take the final call on resumption of DA and DR this week, according to News18 Hindi.
Earlier it was reported that the central government might restore Dearness Allowance from September. The decision was taken in the recent meeting of the finance ministry officials, the National Council of Joint Consultative Machinery and the department of personnel and training, according to media reports. “In our meeting held on 26th June 2021, it has been agreed that central government employees’ DA and pensioners’ DR benefit will be resumed in September 2021," Shiva Gopal Mishra, secretary, staff side at National Council of JCM has said, according to a report in Mint.
At present, the central government pays its employees a dearness allowance of 17 per cent, which has been effective from July 2019. The central government stalled the implementation of the DA hike in the wake of Covid-19 pandemic last year. Since then, the central government employees are getting their DA at an earlier rate. Three increments are due as of now including the hike of January 2020, July 2020 and January 2021.
DA is revised twice every year – in January and July. So the DA hike of July 2021 will also be added to the final amount when the it will be restored.
Dearness Allowance is a component of salary of government employees and pensioners, aimed at soothing the impact of inflation. To cope up with the increasing inflation rates, the effective salary of government employees is revised periodically. As DA is related to cost of living, it varies from employee to employee based on whether they work in urban sector, semi-urban sector or the rural sector.The government employees will have to wait at least two months to avail of these benefits.
In 2006, the Union government changed the formula to calculate the dearness allowance for central government employees and pensioners. The DA is calculated as per the following formula, as mentioned by ClearTax. For the central government employees: Dearness Allowance % = ((Average of All-India Consumer Price Index (Base Year 2001=100) for the past 12 months -115.76)/115.76)*100. For Central public sector employees: Dearness Allowance % = ((Average of All-India Consumer Price Index (Base Year 2001=100) for the past 3 months -126.33)/126.33)*100