7th Pay Commission: In order to give some relief to the Central Government employees and pensioners amid rising inflation and the Kovid-19 epidemic, the Central Government on Wednesday announced a salary hike. dearness allowance (DA) and Dearness Relief (DR). The Cabinet Committee on Economic Affairs (CCEA) has increased gives up to 28 percent. The new rate will be effective from July 1, 2021. The move will benefit about 50 lakh employees and about 65 lakh pensioners.
“The Cabinet Committee, chaired by the Hon’ble Prime Minister Shri Narendra Modi has today approved enhancement of Dearness Allowance to Central Government Employees and Dearness Relief to Pensioners to 28% w.e.f. 01.07. does. 17% of basic pay/pension,” the Center said in a statement.
In the light of the coronavirus pandemic in the country, the Center had last year withheld dearness allowance of central government employees. “In view of the unprecedented situation arising out of the COVID-19 pandemic, three additional installments of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners, which were payable from 01.01. and 01.01.2021, was put on hold,” the cabinet said in a statement. Employees and pensioners have not received any DA arrears from January 1, 2020 to June 30, 2021. It was mentioned earlier that due to the amendment Any increase in DA will also take into account the previous hike as on July 1, 2021.
“Last year, the central government had decided to suspend the distribution of DA to save money for dealing with medical emergencies due to the pandemic. Amrita Tonk, Partner, L&L Partners said, the hike in DA will come as a relief and will act as a financial incentive for both government employees as well as pensioners.
DA Increase Calculation:
Central government employees and pensioners are getting 17 percent DA from July, 2019. “The #Cabinet approves restoration of three installments of Dearness Allowance and Dearness Relief with effect from 01.07.2021, representing an increase of 11% over the existing rate of 17. % of Basic Pay/Pension. No arrears will be paid for the period from 01.01.2020 to 30.06.2021, said Jaideep Bhatnagar, Principal Spokesperson of the Government of India and Principal, Press Information Bureau.
Dearness Allowance is a component of salaries of government employees and pensioners, aimed at mitigating the effects of inflation. The Center revises the DA twice every year – in January and July. This is to help employees and pensioners to deal with rising inflation. Since DA is related to cost of living, it varies from employee to employee depending on whether they work in urban area, semi-urban area or rural area.
Retail inflation declined to 6.26 per cent in June. Consumer price index inflation was above the Reserve Bank of India (RBI) limit of 6 per cent for the second consecutive month. Wholesale price-based inflation eased marginally to 12.07 per cent in June.
“This is a welcome move as the coronavirus has really shaken the economic foundation of the country, and DA is paid to compensate for inflation. Inflation affects the price of everything, and its impact may vary marginally from location to location, so hopefully this increase will bring relief to the beneficiaries,” said Sajay Singh, Partner, J Sagar Associates.
According to media reports, the central government is now likely to restore the Seventh Pay Commission dearness allowance and dearness relief benefits by September.
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