The Central Government has decided to increase Dearness Allowance (DA) for Central employees and pensioners. The rate of dearness allowance has been increased from 17% to 28%. This increase has been made after one and a half years and it will benefit about 1.14 crore, Central government employees and pensioners. The hike in DA and DR will put an additional burden of Rs 34,401 crore on the exchequer. 

Will They Get Arrears Too?

Because of the Covid-19 pandemic, the government had stopped 3 additional instalments of DA and DR for one and a half years. The question now is, will the government pay the arrears of these instalments? The government made it clear that arrears would not be given.

The government has said that during the period from 1 January 2020 to 30 June 2021, the withheld DA arrears will not be given. The DA percentage that was made during this period has been added and restored from July 1.

Jaideep Bhatnagar, the Chief Spokesperson of the Government of India said, the cabinet has restored three installments of DA and DR with effect from July 1, 2021. DA will increase by 11%, which means 17% on the first basic pay and the increased rate of 11%. Overall, 28% DA of Basic Pay will be given. 

DA And Salary Calculation

1. According to the 7th Pay Commission, DA is increased twice a year. Because of the Covid-19 pandemic, the government had stopped three instalments of DA and DR. These instalments were – 4% on January 1, 2020, 3% on July 1, 2020, and 4% on January 1, 2021. Overall, 11% DA would have been made which was frozen. Now it has been restored from July 1.

2. DA i.e. Dearness Allowance is a component of the salary of central employees and pensioners. Keeping inflation in mind, the central government announces to increase in the dearness allowance twice a year in January and July. There is variation in the DA of each employee. For example, the amount of dearness allowance is different in urban, semi-urban and rural areas. 

3. Till June 30, 2021, central employees used to get a 17% dearness allowance. Now from July 1, the total DA will be 28%. At present, if central employees get Rs 18000, then now their salary will increase by 11%. That is an increase of Rs 5040. 

4. The government will not give DA arrears on the period between 1 January 2020 to 30 June 2021. The increased DA will be given only from 1st July 2021.

5. The increase in DA and DA amount which was stalled in the last three instalments, added up to 11%. The same 11% DA and DR will be applicable from July 1. The DA and DR from 1 January 2020 to 30 June 2021 will remain the same as before at 17%. 

Increase In Monthly Salary

At present, central employees are getting a 17% dearness allowance. Now, this allowance has increased to 28%. For example, if the basic salary of an employee is 20 thousand rupees, then at the rate of 17%, DA is Rs 3400 per month.

Now, this DA will increase to Rs 5600. This means, there will be an increase of Rs 2200 in the salary of the month. Similarly, if the basic salary is Rs 50,000 per month, then DA will increase from Rs 8500 to Rs 14,000. This means, 5500 rupees increase in the monthly salary. This calculation will be applicable from July 1.

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