21% DA For 50 Lakh Govt Employees Almost Confirmed Under 7th Central Pay Commission; Effective January Salary?

The global financial inflation brought by covid 19 last year has come out in favour of the government employees. Considering the current rate of inflation, the centre reportedly has decided to increase the Dearness Allowance (DA) and Dearness Relief (DR) for all its employees by 4%. 

Hike Was On Hold Since April 2020

The rise in DA for 50 lakh employees and DR for 61 lakh prisoners was kept aside since April last year because of the economic crisis that Covid 19 brought with itself. Though there is no official announcement made, reports suggest that the government might start issuing the increased DA from January itself. 

Considering the current inflation rate of 28%, the centre may increase the DA rate by 4%. This means the present rate of 17% will increase to 21%. The hike is calculated by a formula suggested by the 7th Central Pay Commission.

Hold Was Applicable Till July 2021

Earlier, when the payment of DA was suspended in April 2020, the Department of expenditure had issued an official memorandum mentioning that the center won’t pay the DA installment of 1 July 2020 and 1 January 2021 due to the economic impact of Covid 19.

This meant the payment of the DA installment was put on hold till July 2021. However, as reported earlier, the appeal of the Association of Employees Confederation of Central Government Employees and Workers to the Union finance minister, Nirmala Sitharaman, may have changed the situation. 

The association had asked the finance minister to look at the inflation rate and consider payment of DA to the eligible government officers by informing her the status of current union treasury.

Previous Hikes In DA

Usually, DA is modified twice a year according to the rate of inflation. The last 4% hike in DA was proposed in January 2020 and approved by the cabinet in March last year.

Though this hike benefitted around 50 lakh employees and more than 60 lakh prisoners, the salary and pension recipients were deprived of the DA due to the economic crisis brought by the pandemic.