DA hike news: The dearness allowance for central government employees has been hiked from 28 percent to 31 percent of the basic pay. The 3 percent DA hike will be effective from July 1, 2021, informed the Finance Ministry.
The Department of Expenditure clarified that the term 'basic pay' means the pay drawn as per the 7th pay commission matrix. The basic pay component does not include any other type of pay like special pay.
The Department of Expenditure had released an office memorandum on October 25, 2021, which stated, "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."
DA hike rate July 2021: 3 percent
Who will benefit from the DA hike?
Besides all central government employees, the civilian employees paid by the Defence Services will also benefit from the dearness allowance hike.
Overall, a total of 47.14 lakh central government employees and 68.62 lakh pensioners will benefit from the hike in dearness allowance and dearness relief.
The Defence Ministry and the Railways Ministry will be issuing separate orders for the armed forces personnel and the railway employees.
COVID-19 pandemic impact
The central government had frozen three additional installments of dearness allowance and dearness relief that were due from January 2020, July 2020 and January 2021 following the outbreak of the COVID-19 pandemic. The freeze was lifted in July 2021 and the dearness allowance and dearness relief rate was hiked by 11 percentage points to 28 percent which includes:
DA hike in January 2020: 4%
DA hike in July 2020: 4%
DA hike in January 2021: 3%
The latest DA hike of 3 percent is for the period between July 2021 and January 2022.
Background
The Union Cabinet had approved a 3 percent hike in dearness relief (DR) for pensioners and dearness allowance (DA) last week for central government employees over the existing 28 percent rate.
The dearness allowance rate was increased to 28 percent from 17 percent in July 2020. The 3 percent hike will now take the dearness allowance rate to 31 percent.
The impact of the hike in the rate of dearness allowance and dearness relief will be around Rs 9,488.70 crore on the exchequer.
What is dearness allowance?The Dearness Allowance or DA is an allowance paid to the central government employees and pensioners in India. The DA is calculated as a percentage of the employee's basic pay to mitigate the impact of inflation on people. |
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