Central government employees expected to get DA hike

This piece of news could come as a Holi Dhamaka for the central government employees as there might be an announcement of the Dearness Allowance (DA) hike.

This comes after the government announced that the employees will get full benefits of dearness allowance starting July 1, with all the three pending installments being restored prospectively.

The three installments of dearness allowance for central government employees and DR for pensioners, due on January 1, 2020, July 1, 2020, and January 1, 2021, were frozen in view of the COVID-19 pandemic.

This would eventually give a whopping rise of the central government employees’ salaries as their existing DA of 17 per cent would suddenly become 28 per cent (17 + 3 + 4 + 4). But there is a catch. An employee needs to remember the 7th CPC Fitment Factor of 2.57 while calculating the probable rise in monthly salary.

According to the 7th Pay Commission, if an employee draws a monthly basic salary of Rs 21,000 then one’s monthly 7th CPC salary will be Rs 53,970 (Rs 21,000 x 2.57).

Also, the government servant is eligible for various 7th Pay commission perks like DA, HRA, Travel Allowance (TA), medical allowance, etc.

This decision of DA restoration will further increase one’s PF passbook balance too. As per the 7th pay commission payment rules, a central government’s PF contribution is calculated on the basis of basic salary plus DA.