7th Pay Commission Latest News: Govt likely to hike DA, DR from April 1; know what it will mean for central govt employees
New Delhi | Jagran Business Desk: In what could be a relief for over 1 crore Central Government employees and pensioners, the Centre is likely to implement the previously announced hike in Dearness Allowance (DA) and Dearness Relief (DR) after Holi. The Centre had last year announced a 4 per cent hike in DA and DR of the Central Government employees and pensioners.
The hike in DA and DR will benefit over 48 lakh working employees of the Central Government and over 65 lakh pensioners. The hike of 4 per cent will increase the DA to 21 per cent. Currently, the DA provided to the central government employees is at 17 per cent.
According to media reports, while the government is yet to announce any deadline on the implementation of the wage code, it is likely that the same may be implemented from April 1 2021. The government is also expected to change the official working hours, gratuity and provident funds of its employees from April 1.
The change in monthly PF and gratuity contribution will come into effect as the government has earlier proposed a new wage code, which has the provision to have the basic salary of the employees at 50 per cent of one's net monthly CTC. Once come into effect, an employee will not get more than 50 per cent of his/her net monthly salary in the form of an advance. The change would affect the basic pay structure of an employee which includes the take-home salary, monthly provident funds and gratuity.
Media reports also suggest that the government is mulling to provide 4 per cent arrears also, which will increase the DA to 25 per cent. However, no official announcement has been made yet. The increase in dearness allowance will be in accordance with the accepted formula, based on the recommendations of the seventh Central Pay Commission.
The DA and DR hike will cost Rs Rs 12,510.04 crore and Rs 14,595.04 crore respectively in Financial Year 2020-21 and will benefit 48.34 lakh central government employees and 65.26 lakh pensioners. The dearness allowance is given to the central government employees to help them bear with their expenses keeping inflation in mind. It is announced twice a year, the first instalment from January to June and the second one from July to December.
Posted By: Talibuddin Khan