Central Government Employees Alert! DA hike may happen again: Check salary hike like this

As we approach the holiday season, central government employees are sure to get another treat in the form of an increase in their Dearness Allowance (DA) and Dearness Relief (DR) (DR). The central government is expected to increase DA rates by 3% for both employees and retirees before the holiday season. The decision is expected to be taken soon in view of the Central Government has already reinstated the employee DA. With the increase effective in July 2021, the government increased the DA from 17 to 28 per cent.

It should also be noted that the government has increased the House Rent Allowance (HRA) for employees from 24% to 27%. With the possibility of another 3% increase in DA and DR, the DA will be around 31% of their basic salary in the not too distant future.

The government first increased dearness allowance by 4% in January 2020, followed by 3% in June of the same year. In January 2021, central government employees got another hike with a 4% increase in DA.

On the other hand, the employee unions expect the salary hike to be announced soon. As per AICPI data, DA is payable at 31% as the index for June 2021 climbed 1.1 points, taking the total tally to 121.7.

The DA hike, which was planned to be announced in September 2021, is likely to take effect in the first half of 2021. However, there has been little indication from the government that it is planning to announce another hike in DA. According to media reports, if it is announced this month, then DA will be payable with October payment.

On the other hand, the employee unions are of the view that the government should include the DA hike in the September salary as well. Along with this, it is worth noting that the increase will help around 48 lakh central government employees and around 65 lakh retirees.

The Center has already increased the Variable Dearness Allowance in an effort to provide some relief to its employees (VDA). This kept the monthly cost between Rs 105 and Rs 210. The new prices came into effect in April 2021. At that time, it was estimated that 1.5 crore workers would benefit from it.

All these amendments follow a brief DA freeze that lasted for around 18 months due to the outbreak of COVID-19 and the resultant economic impact. With all the hikes being implemented by the central government, some states increased their DA rates for government employees. Uttar Pradesh, Jammu and Kashmir, Jharkhand, Haryana, Karnataka, Rajasthan and, more recently, Assam are among these states. Most of them had increased the DA of government employees by about 11%.

If the government increases the DA by 3%, it will be equal to 31% of the basic pay. Employees and retirees just need to calculate the DA amount by multiplying their basic salary by the same percentage. For example, if an employee is paid Rs 20,000 per month, his 3% is approximately Rs 600. Consequently, on top of the minimum income of Rs 20,000, the employee will receive an additional Rs 600. If the increase is 31%, then 31% of Rs 20,000 becomes Rs 6,200, which is the amount the employee would receive.

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