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7th Pay Commission: 4% DA Hike Expected in Jan, Central Govt Employees Salary Likely to Increase by Rs 49,420

Though an official confirmation is awaited, the Narendra Modi-led Centre is expected to hike the dearness allowance (DA) component for central government employees by 4% to 42% (from 38% earlier). Read the detailed report here.

Shruti Kandwal
The salary will increase significantly if the fitment factor is raised.
The salary will increase significantly if the fitment factor is raised.

The government is anticipated to raise the DA rate from the existing level of 38% to 42%. Pensioners should likewise expect a similar increase in the DR rate.

For all employees of the Central government, we have some wonderful news. The most recent update indicates that there is a good chance that the fitment factor may rise soon. The central government employee unions have long pushed for an increase in the fitment factor. They want the fitment factor to be increased by the government from 2.57 to 3.68.

The salary will increase significantly if the fitment factor is raised.

Calculation of salary after the probable increase in fitment factor

After the Union Budget for the next year, the government may decide to raise the fitment factor. If the government raises the fitment factor three times, the employees’ base pay, excluding benefits, will be 18,000 X 2.57, or Rs. 46,260.

In addition, if the employees' requests are approved, the salary will be 26000 X 3.68, or Rs 95,680. The basic salary will be Rs. 21000 and the total salary, excluding allowances, will be Rs. 21000 X 3 = Rs. 63,000 if the government accepts three times the fitment factor.

How fitment factor plays a role in the salary?

The salary of central employees is significantly influenced by the fitment factor. In addition, to pay allowances, the 7th Pay Commission recommended that the base salary and fitment factor of central employees be used to determine their salaries. This is the cause of the more than two-and-a-half-fold increase in central employees' salaries.

The 7th Pay Commission's fitment factor of 2.57 is multiplied by the Basic Salary, Dearness Allowance, Travel Allowance, and House Rent Allowance for determining the salary.

EPF and Gratuity are also included in the salary

Along with the allowances, the salary also includes extras like the Monthly Provident Fund and the Gratuity. The EPF and gratuity of a central employee are calculated using a different formula. Following the application of all allowances and CTC deductions, the take-home pay is determined.

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