Centre had frozen the three installments of DA for central government employees and DR for pensioners due to the COVID-19 pandemic.
Dearness Allowance (DA) finally became a reality for lakhs of Central government employees and pensioners last month when the government announced that the employees will be given full DA benefits soon. This was confirmed by Minister for State for Finance, Anurag Thakur, in a written reply to Rajya Sabha.
He had had said the central government employees will get full DA benefits, with three pending installments being restored prospectively.
1. DA increase to be effective from July 1
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However, what may upset the central government employees is that any increase in DA from July 1 will only be effective from that day, which means that the employees would not get any arrears on non-revision of DA for previous period.
2. DA, DR installments frozen
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It may be recalled that Prime Minister Narendra Modi-led government at the Centre had frozen the three installments of DA for central government employees and DR for pensioners, due on January 1, 2020, July 1, 2020 and January 1, 2021, due to the COVID-19 pandemic.
"As and when the decision to release the future installments of Dearness Allowance due from 01.07.2021 is taken, the rates of DA as effective from 01.01.2020, 01.07.2020 and 01.01. 2021 will be restored prospectively and will be subsumed in the cumulative revised rates effective from 01.07.2021," Thakur had told Rajya Sabha in a written reply.
3. Fitment factor
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As per some reports, the central government employees must keep in mind 7th CPC Fitment Factor of 2.57 while calculating the probable hike in monthly salary. This means that as per the 7th Pay Commission Fitment Factor, if an employee draws a monthly basic salary of Rs 21,000 then one's monthly 7th CPC salary hike will be Rs 51,400 (Rs 20,000 x 2.57).
4. Existing DA at 17%
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Central government employees' existing DA is currently at 17 percent. This became effective from July 2019 with further revision due from January 2020. However, this along with subsequent two other revisions were suspended due to Covid.
5. Increase in DA
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Last year, the Cenre had approved a 4 percent increase in DA for government employees and pensioners to 21 percent. However, in wake of the pandemic, the DA disbursement at increased rates was suspended along with DR for the pensioners.
