From July 1, 2021, the Dearness Allowance for central government employees has been hiked to 31 percent of the basic pay from 28 percent, according to the Finance Ministry.
Hike In Dearness Allowance
Here, the term ’basic pay’ means the pay drawn as per the 7th pay commission matrix and does not include any other type of pay like special pay, etc, as per an office memorandum, form the Department of Expenditure, under the Finance Ministry.
The office memorandum dated October 25 said, “….the Dearness Allowance payable to central government employees shall be enhanced from the existing rate of 28 percent to 31 percent of the basic pay with effect from July 1, 2021,”.
Hike Applicable To Civil Employees
This hike will also be applicable to the civilian employees paid from the Defence Services.
In the case of Armed Forces personnel and Railway employees, separate orders will be issued by the Defence and Railways Ministry, respectively.
Last week, the Union Cabinet had approved a 3 percent hike in dearness allowance (DA) for central government employees.
They have also approved the dearness relief (DR) for pensioners over the 28 percent existing rate.
This decision is expected to benefit over 47.14 lakh central government employees and 68.62 lakh pensioners.
The DA rate was increased from 17 percent to 28 percent during July this year.
With the addition of a 3-percent hike, now, the DA rate stands at 31 percent.
Impact On The Funds
It will have a combined impact on the exchequer on account of the Dearness Allowance and Dearness Relief would be Rs 9,488.70 crore.
The government had frozen the three additional instalments of the DA and DR considering the COVID pandemic outbreak.
The DA and DR were due from January 1, 2020, July 1, 2020, and January 1, 2021.
Although, the freeze was lifted from July 1, 2021, and the DA, DR rate was hiked by 11 percentage points to 28 percent.
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