New Delhi: In what can be described as a major development for numerous central government employees, the Union Cabinet headed by Prime Minister Narendra Modi on Wednesday (July 14) officially approved the hike in Dearness Allowance (DA) given to the employees to 28% from 17%, which will be in effect from July 1. The call to restore DA hike was made after it was frozen last year.
It also needs mentioning that the government had frozen DR and DA of central government employees and pensioners last year keeping in view the fall in government revenue collection amid the coronavirus pandemic and also after the increase in spending on social welfare schemes.
Currently, three instalments of Dearness Allowance were pending – 4% from January 1 to June 30 2020, 3% from July 1 to December 31, 2020 and 4% from January 1 to June 30, 2021.
With the Centre’s decision to restore the DA, government employees is set to witness a big jump in their take-home salary, provident fund gratuity and contribution as well.
While taking into consideration on how additional fund a government employee will get after the Dearness Allowance restoration, here is how the calculation looks like. Under the 7th CPC, the minimum Grade Pay of a Level-1 government employee is Rs 1,800 and the basic salary ranges between Rs 18,000 and Rs 56,900.
At the entry-level, any employee having basic salary of Rs 18,000, will witness a take-home pay jump by Rs 1,980 (which is in effect from July 1) before taking into account deduction towards taxes and provident fund.