Central government employees are in for more good news as the government is looking to once again hike the Dearness Allowance (DA). The Central government had previously implemented a hike for central government employees which amount to a rise of 28 per cent. However, new reports suggest that the DA will be hiked to a further 31 per cent. The DA which was previously at 17 per cent was hiked to 28 per cent and was set to take effect from July of 2021. There were early indicators prior to this, that the government was looking to increase the DA by a further 3 per cent. This increase means that government employees and pensioners will not only see an increase in their DA but also their overall salary.
The Dearness Allowance was previously increased in January of 2020, where the government had hiked it by 4 per cent, this was then followed by another 3 per cent in June of that year. Once more in January of this year, the DA got an increase of another 4 per cent, which left it at 17 per cent. After the 11 per cent hike, it was resting at 28 per cent. It should be noted that the June 2021 DA hike is not yet finalised, but the AICPI June data suggest a further increase by 3 per cent.
It should also be kept in mind that the government will not pay for any DA arrears for the period between January 1, 2020, and June 30, 2021.
With the changes to the DA rates, there will be nearly 48 lakh beneficiaries who are central government employees and around 65 lakh pensioners across India. 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.
Before all these changes had come into play, there was a temporary freeze on the DA for around 18 months due to the Covid-19 pandemic and the impact it had on the economy’s health. In light of these new hikes, there were also a few states that increased their DA rates for their government employees. These states include Uttar Pradesh, Jammu and Kashmir, Jharkhand, Haryana, Karnataka, Rajasthan and most recently, Assam. Most of them had increased the DA for government employees by around the same 11 per cent that the central government increased it by.
The Department of Expenditure, under the Ministry of Finance, had recently put out a memorandum earlier in the month of August, regarding the revised rates of the Dearness Allowance (DA) to employees of the central government and central autonomous bodies. This memorandum and the changes within were set to apply to the above employees of the above-mentioned employment, who are still drawing their salary in the pre-revised grade pay as per the 5th pay commission and the 6th pay commission.
In the memorandum, the department mentioned that there would be no DA arrears that will be paid to these employees for the period between January 1, 2020, to June 30 2021. The office memo also stated that the DA for the period of January 1, 2020, to June 30, 2021, for both the 5th pay commission and 6th pay commission would remain unchanged. It also mentioned that the employees would continue to receive 312 per cent under for the 5th pay commission while employees drawing salary under the 6th pay commission would get 164 per cent.
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