7th Pay Commission: The Centre has increased the Dearness Allowance (DA) as well as the Dearness Relief (DR) for all of its central government employees. The DA which was previously sitting at 17 per cent has now been hiked up to 28 per cent which will take effect from July. There are also indications that there is a possibility for the government to approve the Dearness Allowance for June as well, according to reports. The Centre will likely also approve a DA hike of another 3 per cent soon, said the reports. It was also mentioned that according to some experts this announcement will likely come soon. If this does come to pass, it would mean that the Dearness Allowance for central government employees will see an overall increase that will leave it standing at 31 per cent along with a possible increase in salaries as well.
There was a previous Dearness Allowance increase in January of 2020 where the government hiked it by 4 per cent, which was followed by another 3 per cent increase in June of that same year. This trend carried through to January of 2021 and the DA once again saw a hike of 4 per cent. If it goes up again, it will reach the 31 per cent mark.
The government will not, however, pay for any DA arrears for the period between January 1, 2020, and June 30, 2021. With the change in the DA rates, it will permeate to nearly 48 lakh central government employees and 65 lakh pensioners across the country. In light of these changes, there were also a few states that upped their DA rates for their respective states. These states include Uttar Pradesh, Jammu and Kashmir, Jharkhand, Haryana, Karnataka and Rajasthan.
Earlier, in a bid to give some measure of relief to its employees, the Centre hiked the Variable Dearness Allowance (VDA), which put it in a range of Rs 105 to Rs 210 per month. The rates had been effective from April, 2021. It was intended to benefit around 1.5 crore workers at the time.
“It will be for scheduled employment in central sphere and applicable to the establishments under the authority of central government, railway administration, mines, oil fields, major ports or any corporation established by the central government. These rates are equally applicable to contract and casual employees/workers,” the ministry of labour & employment said in a statement.
Subodh Sadana, Partner, AnantLaw was quoted as saying, “It is a welcome relief for applicable central government employees in this time of raging second wave of pandemic. This will also result in increase in the provident fund, gratuity and other benefits directly linked with DA.”
Before all these changes came into play, it should be noted that there was a temporary freeze on the DA for around 18 months. Employees of the central government and pensioners as well can roughly sketch out a potential salary hike according to their basic pay grade.
The Dearness Allowance is an important part of an employee’s salary who works for the government. It serves the purpose of helping said employee or pensioner for that matter, to cope up with the rising rates of inflation. The DA and DR rates for central government employees are revised and announced twice every year. Once in January and again in July. The DA that a central government employee or pensioner can expect is entirely dependent on their area of work. This could be urban sector employment, semi-urban sector or rural sector.
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