New Delhi: The central government is likely to provide relief to its employees and retirees at a time when India’s inflation rate has consistently exceeded the Reserve Bank of India’s comfort zone of 2-6%. The CPI inflation rate has already passed its eight-year high, and the cost of a variety of goods is rising. To counter the effects of inflation, the government is expected to announce another DA hike for central government employees under the 7th Pay Commission.
In July, the government may consider increasing the DA to 5%. If the claim is to be believed, then the central government employees will get 39 percent DA. Government employees currently get DA of 34% of their basic pay. If DA 5% increase is implemented then they will get 39% dearness allowance in addition to their basic pay. Government employees get Dearness Allowance (DA), while pensioners get Dearness Relief (DR). Read more: Airtel plans: Rs 499 postpaid plan, Rs 999 postpaid plan, Rs 1,199 postpaid plan, Rs 1,599 postpaid plan Disney+ offers Hotstar subscription.
Based on changes in All India Consumer Price Index, DA is updated (AICPI). Due to higher AICPI, the chances of increase in their dearness allowance to government employees are very high. Retail inflation for May stood at 7.04 per cent, higher than the RBI’s target range of 2 to 6 per cent. Read more: Mark Zuckerberg, Elon Musk, Jeff Bezos lose $60 billion in assets in first 6 months of 2022
Rumors that the government may consider a 5% DA hike in July have been fueled by AICPI in April.
In the light of the extraordinary situation arising out of the outbreak of COVID-19, the Central Government had stopped three payments of DA and DR for January 1, 2020, July 1, 2020 and January 1, 2021. Finance Minister Nirmala Sitharaman, in a written reply to a question in the Rajya Sabha in August last year, said that the withholding of DA and DR resulted in savings of about Rs 34,402 crore.
According to a notice from the Department of Expenditure, after the most recent hike that came into effect in April, an employee whose basic salary is Rs 18,000 will get dearness allowance of Rs 6,120. The employee was earlier getting DA of Rs 5,580 at the rate of 31%. This would mean that after the recent DA hike, there has been an increase of Rs 540. DA will be Rs.7,020 if DA is increased by additional 5%, or if employee receives DA of 39% on basic pay, Rs.18,000 instead. This indicates that if a DA hike of 5% is applied, the salary will increase by Rs 900.