It will come into effect by the beginning of the next year.
The government is issuing another hike to the dearness allowance (DA) of its employees under the 7th pay commission.
It will come into effect by the beginning of the next year.
This time the hike is said to be of 3% which can increase the salary by as much as ?20,000.
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Calculation
The DA for government employees under the 7th Central Pay Commission is calculated based on their basic salary.
It is calculated by multiplying the DA rate with the basic pay of a government employee, and is then adjusted in the gross salary.
DA for govt employees are increased twice a year, between January and July.
To Make Up For Inflation
The allowance is paid as a compensation for inflation which increases the costs of living and to help the employees maintain their living standards.
Beneficiaries include employees of public sector enterprises and pensioners.
Therefore it is hiked twice a year to adjust for inflation in the economy.
It was frozen in 2020 due to the pandemic.
Earlier Hikes
The current DA rate stands at 31% after being hiked 3% in October, and by 11% in July.
In July 2021, the Centre hiked the DA by 11% to 28%.
The previous rate was 17%.
Again in October, the DA was hiked to 31%.
Diwali Hike
The expenditure department of the finance ministry said in an office memorandum on October 25 that the DA payable to central government employees will be raised from the existing rate of 28% to 31% of the basic pay with effect from July 1, 2021.
This came just days before Diwali into the bank accounts of more than 4.7 million central government employees and as many as 6.86 million pensioners.
The news about the latest hike is based on reports but the official announcement is expected to happen soon.
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