The Central Government has recently clarified that it has no plans to increase the monthly gross basic pay of Central Government employees after the recent hike in Dearness Allowance (DA). “Whether the Government is actively considering to increase the monthly Gross Basic Pay of Government employees after restoration of full benefits of Dearness Allowance (DA) and Dearness Relief (DR) as per the fitment factor as per the recommendations of the Seventh Pay Commission Minister of State in the Union Finance Ministry Pankaj Choudhary has said, “The Central Government is not actively considering any such scheme.”
He further said in a written reply to a question in Rajya Sabha, “The fitment factor of 2.57 was applied uniformly to all categories of employees, only for the purpose of fixation of pay in the revised pay structure based on the recommendations of the Seventh Central Pay Commission.” “
Earlier this month, the central government increased the dearness allowance and dearness relief for central government employees and pensioners from 17 per cent to 28 per cent. The move comes at a time when retail inflation has remained above 6 per cent for two consecutive months. The increase in allowance will help lakhs of beneficiaries to tide over rising food and oil prices amid the coronavirus pandemic. The revised DA will be applicable from July, 2021.
Dearness Allowance is an amount given to Central Government employees and pensioners in an effort to overcome the rising inflation in the country. Inflation drives prices across the country at different rates depending on location. Therefore, depending on the location of the employee and the rate of inflation at that time of the year, DA is calculated accordingly. DA has been included since 1996 to compensate for price rise or inflation in a particular financial year. It is revised twice every year – in January and July.
In view of the outbreak of coronavirus in the country, the central government had stopped the increase in dearness allowance last year. DA was increased to 28 per cent in July. A central government employee who gets Rs 18,000 per month will get an 11 per cent hike in his take-home pay. His salary will increase by Rs 5,040 from July. For government employees, dearness allowance will be 17 percent from January 1, 2020 to June 30, 2021. The Finance Ministry said that no dues will be paid from January 1, 2020 to June 30, 2021.
Commenting on the Centre’s decision to hike the dearness allowance of central government employees, Sajay Singh, Partner, J Sagar Associates said, “It is a welcome move as the coronavirus has really shaken the economic foundation of the country and has caused inflation to rise. DA is paid to compensate for Rs. Inflation affects the price of everything and its effect may vary marginally from location to location, so hopefully this surge will bring relief to the beneficiaries.”
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