7th Pay Commission latest update: BIG news for lakhs of Central government employees regarding DA hike

In what comes as good news for millions of Central government employees, the Ministry of Labour & Employment on Friday (May 21) announced an increase in variable dearness allowance (VDA) by Rs 105 to Rs 210 per month.

The hike, which will be effective from April 1, 2021, will also lead to an increase in the rate of minimum wages for more than 15 million central sphere employees and workers.

The VDA is revised on the basis of the average Consumer Price Index for Industrial Workers (CPI-IW), a price index compiled by the Labour Bureau.

The ministry said that it will be for scheduled employment in the central sphere and applicable to the establishments under the authority of central government, railway administration, mines, oil fields, major ports or any corporation established by the central government. These rates are equally applicable to contract and casual employees/workers.

"The VDA is revised on the basis of average Consumer Price Index for industrial workers (CPI-IW) a price index compiled by Labour Bureau. The average CPI-IW for the months of July to December 2020 was used for undertaking the latest VDA revision," a statement from the ministry read.

Santosh Gangwar, Labour & Employment Minister said, “this will benefit about 1.50 crore workers engaged in various scheduled employments in central sphere across the country. This hike in VDA will support these workers particularly in the current pandemic times”.