As we approach the holiday season, central government employees are set to get another treat in the form of a raise in their Dearness Allowance (DA) and Dearness Relief (DR) (DR). It is expected that the Central government will increase DA rates for both employees and retirees by another 3% ahead of the holiday season. This decision is expected to be made soon, given the central government has already reinstated employee DA. The government increased the DA from 17 to 28 percent, with the surge taking effect in July 2021.
It should also be noted that the government increased the House Rent Allowance (HRA) for employees from 24% to 27%. With the possibility of another 3% increase in the DA and DR, the DA would be about 31% of their basic wage in the not-too-distant future.
The government previously increased the Dearness Allowance by 4% in January 2020, followed by another 3% rise in June of the same year. In January 2021, central government employees received yet another raise, with the DA increasing by 4%.
Employees’ unions, on the other hand, are anticipating the raise announcement to be made soon. The DA is payable at a 31% rate, according to AICPI statistics, because the index for June 2021 climbed by 1.1 points, bringing the total number to 121.7.
The DA increase, which was planned to be announced in September 2021, will most likely be effective in the first half of 2021. However, there has been little indication from the government that it plans to announce another hike in DA. According to media reports, if it is announced this month, the DA will be payable with the October payment.
Employee unions, on the other hand, believe that the government should include the DA increase in the September wage as well. With that stated, it’s worth noting that the increase will help about 48 lakh central government employees and around 65 lakh retirees.
The Centre has already increased the Variable Dearness Allowance in an attempt to provide some relief to its staff (VDA). This put the monthly cost between Rs 105 and Rs 210. The new prices went into effect in April 2021. At the time, it was estimated that 1.5 crore workers would gain from it.
All of these modifications follow a brief DA freeze that lasted roughly 18 months because to the Covid-19 outbreak and the resulting economic impact. With all of the raises that the central government was implementing, a few states hiked their DA rates for government employees. Uttar Pradesh, Jammu and Kashmir, Jharkhand, Haryana, Karnataka, Rajasthan, and, most recently, Assam are among these states. The majority of them had raised the DA for government employees by about 11%.
If the government raises the DA by 3%, it will be equal to 31% of the base pay. Employees and retirees only need to calculate the DA amount by multiplying their base wage by the equivalent percentage. For instance, if an employee is paid Rs 20,000 per month, 3% of that is around Rs 600. As a result, on top of the Rs 20,000 minimum income, stated employee will receive an additional Rs 600. If the raise is 31%, then 31% of Rs 20,000 becomes Rs 6,200, which is the amount the employee will receive.