7th Pay Commission Latest Update: Centre Hikes Dearness Allowance of 48 lakh Central Government Employees

Good News for Central Government Employees working in different Ministries of India including Agriculture Ministry.  The Cabinet Committee chaired by Prime Minister Narendra Modi on 15 July 2021 has increased Dearness Allowance (DA) and dearness relief for Central Government employees as well as pensioners that will be applicable from 1^st of July.

The Dearness Allowance for Central Government employees & pensioners has been hiked from previous 17 % to 28%.

The decision is expected to benefit around 48 lakh central government employees & 65 lakh pensioners. It is important to mention that due to Covid-19, the Centre had frozen dearness allowance of central government employees & dearness relief of pensioners since last year (2020). As of now 3 instalments of DA were pending- 4 percent from January 1, 2020 to June 30 2020; 3 percent from July 1, 2020 to December 31, 2020; 4 percent from January 1, 2021 to June 30, 2021. All these arrears of DA will be given to the employees in 3 installments.

What is dearness allowance (DA) and dearness relief (DR)?

The dearness allowance also known as DA is a part of a central government employees’ total salary. It is an adjustment allowance, which the Centre gives employees to compensate for the cost of living because of inflation. The dearness allowance is revised two times a year i.e. in January and July.

It may be noted that DR is the same allowance as DA. It is given to central government pensioners.

Benefit of Hike in DA to Government Employees, Pensioners

Hike in DA or DR will directly lead to an increase in income for central government employees & higher pension for retired employees. That means now they will take home extra money.

Central government employees, who used to get 17% DA on their basic salary, will now receive 28%. The move is expected to cost the Centre approximately Rs 34,400 crore.