There is going to be a bumpy increase in the DA of central government employees and pensioners. Know how much their salary is going to increase.
As a major relief for central government employees and pensioners, the Narendra Modi government announced last month that it would reinstate the dearness allowance (DA) of central employees (CGS) and pensioners from July 1, 2021. Minister of State for Finance Anurag Thakur has said that the three installments of dearness allowance will start being paid from July 1, 2021.
In a written reply in the Upper House of Parliament regarding the payment of DA, Minister of State for Finance (MoS) Anurag Thakur said that three installments of pending DA of CGS will be released and revised DA rates will come into effect from 1 July 2021. Be aware that due to the Kovid epidemic, the government stopped three installments of DA on January 1, 2020, July 1, 2020 and January 1, 2021 for central government employees and pensioners.
Last month, Minister of State for Finance Anurag Thakur told the Rajya Sabha that if it is decided to release the installment of dearness allowance from July 1, 2021, the rates of DA on January 1, 2020, July 1, 2020 and January 1, 2021 were effectively restored. And the cumulative revised rates are effective from 1 July 2021.
Currently all CGS and pensioners are getting 17% DA, which will now increase to 28% including 3% from 1 January 2020, 4% from 1 July 2020, 4% DA increase from 1 January 2021. This shows that there will be a big jump in the take home salary of central employees.
The resumption of DA will provide relief to 65 lakh retired central government pensioners and 52 lakh central government employees. Once the DA is restored, inflation benefits for pensioners will also be restored and their pension will be increased.
How much will the DA increase affect the take home salary
The gross salary of central government employees includes basic salary, DA, House Rent Allowance (HRA), Traveling Allowance (TA), Medical Allowance etc. as DA of all CGS is likely to increase from the current 17% to 28%. DA of employees with basic pay of Rs 18,000 will increase from Rs 3,060 per month to Rs 5,040.
The proposed DA increase would also increase the Provident Fund (PF) and also increase the gratuity contribution of central government employees as these components are calculated as a percentage of basic salary plus DA.
