7th Pay Commission: Good news for Central govt employees! Centre likely to announce 4% DA hike

7th Pay Commission, 7th CPC dearness allowance, Central government employees, 4 percent DA hike, AIC — Image Source : ANI/ REPRESENTATIONAL
7th Pay Commission: Good news for Central govt employees! Centre likely to announce 4% DA hike

7th Pay Commission: There is good news for lakhs of central government employees who are waiting for the announcement of hike in the Dearness Allowance (DA) for January to June 2021 period. According to media reports, the central government is likely to increase Dearness Allowance (DA) for its employees.

The Labour Ministry has declared the AICPI (All India Consumer Price Index) data that indicates that the Centre may announce at least 4 per cent hike in the DA. This is to be noted that the hike in the DA will also lead to a rise in central government employees' Travel Allowance (TA) too.

Last year due to COVID-19 pandemic, the Centre had decided to freeze DA for the central government employees till June 2021. So, this means that even after the government's DA hike announcement, the salary hike will take place only after June 2021.

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So, 4 per cent DA hike for July to December 2020 and the expected 4 per cent DA hike for January to June 2020 under the aegis of 7th pay commission will not reflect in the monthly salary of the govt staffers.

However, this can't be ignored that once the DA hike gets added into the central government employees' salary, there will be a huge jump in their income as there will be an additional 8 per cent hike in their DA.

Currently, the central government employees' DA is 17 per cent of their basic salary. Once the DA gets restored then their DA will go up from 17 per cent to at least 25 per cent (17 + 4 + 4).

What is Dearness Allowance (DA)

Dearness Allowance (DA) is basically a component of salary paid to government employees. DA is a cost of living adjustment allowance paid to government employees and pensioners linked to the Consumer Price Index to offset the impact of inflation. DA is fully taxable.