The dearness allowance, or DA, has significantly kept the inflations of salaries for all central government employees. And now, what could be termed as a major news for them comes in the fold of 53% DA revision, which is set to become part of the basic salary of federal employees under the 7th Pay Commission. It has turned out to bulk up substantially for many central employees and pensioners across the country.
What Is Dearness Allowance (DA)?
Dearness Allowance is a cost of living adjustment allowance for government employees and public sector workers and pensioners. This is modified twice yearly-in January and July-to impact inflationary prices with the aim of keeping purchasing power stable for employees. The percentage of DA-to-basic is again dependent on them being in urban, semi-urban, or rural areas.
Effect Of The 53% DA Increase On Salaries
With the new modifications, a central government employee would now receive 53% of their basic salary as DA compared to the previous rate. Here is how that will affect the salary calculations:
Sample Calculation
If a person has a basic salary of 30,000, they are entitled now to a DA of:
- 53% of ₹30,000 of DA = ₹15,900.
- Earlier, under the 50%, it was ₹15,000.
- Increase in DA= ₹900 per month.
This would be more substantial for someone who has a higher basic salary.
Who Will Benefit From The New DA Increase?
The 53% DA increase will serve:
- To benefit Central government employees under the 7th Pay Commission
- To benefit pensioners and family pensioners getting pensions from the government
- Also applicable to railway employees, PSU workers, and autonomous body staff within the purview of the central pay scales
Would DA Arrears Be Paid?
Employee unions have been demanding DA arrears for the 18-month period when DA was frozen (January 2020 – June 2021). However, the government has yet to confirm anything on the arrears payment.
Conclusion
The 53% hike in DA by the 7th Pay Commission would mark good news for the central government employee and pensioner, as it will contribute to direct salary increase. The increasing inflation levels will mean relief and improved purchasing power from this decision. Employees should review the latest updated salary slips for the new DA figure for them. Another update on salary hike and arrear payment will follow!
Also Read: Retirement Age: Big Update For Retiring Employees, 25% More Gratuity Will Be Given