After much anticipation, lakhs of Central government employees will finally be getting their Dearness Allowance hike of 28 per cent on top of their basic salary. Along with this, the government has also hiked up the House Rent Allowance (HRA) for these employees and pensioners. The central government employees will see this arrive with their September salary, so that is definitely something to look forward to, going into the month of October.
The government had increased the HRA for central government employees as a result of the DA exceeding the 25 per cent mark. As such, the HRA has now been increased to 27 per cent. On July 7, 2017, the Department of Expenditure had issued an order in which it was said that when DA will exceed 25 per cent, the HRA will also be revised. Since July 1, the Dearness Allowance has increased to 28 per cent, which made the increase of the HRA necessary as well.
According to the order issued by the government, the HRA for these employees is divided into three distinct categories, which is according to the cities labelled X, Y and Z. As per this, the HRA for employees in cities under the categorisation of X, will get 27 per cent of their basic pay. For employees in cities Y, the government is giving them, an 18 per cent HRA against their basic salary. Similarly, for those in city Z, the HRA is 9 per cent of their basic salary package.
Based on the Matrix of the 7th Pay Commission, the minimum basic salary for central government employees stands at around Rs 18,000. On this basic salary of Rs 18,000 per month, the central government employees were getting DA of Rs 3,060 till June of 2021, which translated to around a 17 per cent DA. Since July 2021, the Central government employees have seen a hike on that as they received Rs 5,040 per month as per the DA norms of 28 per cent. This means that there is basically an increment of around Rs 1,980 in the monthly salary of these employees. In light of this, the pensioners’ payout will also be decided going forward.
It should be noted that it was speculated earlier that the government would roll out an additional 3 per cent hike in the DA and dearness relief (DR) come October. However, these reports are not confirmed yet as there has not been any clear evidence from the side of the government that this would be the case. In the event that it does happen, employees of the government could see their DA hiked to a staggering 31 per cent.
There was a previous Dearness Allowance increase in January of 2020 where the government hiked it up by 4 per cent, which was followed by another 3 per cent increase in June of that same year. The central government employees saw yet another hike in January of 2021 where the DA once again went up by 4 per cent.
Employee unions were also expecting this 3 per cent hike to be rolled out soon on the back of AICPI data which suggested that the DA payable was at 31 per cent given that the index for June 2021 increased by 1.1 points, leaving the tally at 121.7 points.
So, if it is announced it will be applicable for the first half of 2021 and it will be payable with the salary for October according to several media reports. However, the employee unions content that it should be payable for September as well. Whatever the case, the upcoming festival season is sure to bring about some new changes and reforms going forward.