7th Pay Commission latest news: DA, DR benefits of Central govt employees to restore soon - How will it affect salary?

In a good news for lakhs of Central government employees and pensioners, the Centre is planning to increase the Dearness Allowance (DA) and Dearness Relief (DR) benefits for central government employees from July by 3 per cent.

According to reports, the DA restoration of DA and DA benefits is likely to be done in September. The report is based on the data from the All India Consumer Price Index (AICPI). It is to be noted that the AICPI report with information about the DA from January to May 2021 was released recently and it is expected that DA hike will be done from July.

Notably, the Central government employees and pensioners currently receive 17 per cent DA under the 7th Pay Commission. The DA is a part of the salary given to government employees and pensioners in order to help them beat inflation.

As per reports, the DA of Central government employees Would jump to 28 per cent after the restoration of three remaining DA instalments. It may be recalled that DA was hiked by 4 per cent in January 202. The DA was again hiked in June 020 by 3 per cent. As of late, in January 2021, the DA was further increased by 4 per cent, according to reports.

Since the DA is used by Central government employees to combat the rising prices due to inflation, the DA is calculated and revised twice a year. Revisions take place in January and July. In 2006, the government revised the way DA was calculated. Here's the new formula

1) For Central government employees: DA per cent = {(Average of AICPI (Base Year -2001=100) for the past 12 months -115.76)/115.76} x 100

2) For Central public sector employees: DA per cent = {(Average of AICPI (Base Year 2001=100) for the past 3 months -126.33)/126.33} x 100

Notably, the salary of Central government employees will increase significantly after the DA hike. The hike in DA will also directly affect the LTA, PF and gratuity of Central government employees.