Government employees are expected to soon get a good news regarding their salaries. The Centre may announce another hike in dearness allowance (DA) in July or August, according to reports. The DA and DR are revised twice a year in January and July, based on the retail inflation data.
The retail inflation for April is due for release this week. The inflation in March surged to seven per cent from 6.1 per cent in February. It jumped mainly due to a rise in food items. The inflation in the food basket during the month stood at 7.68 per cent, higher as compared with 5.85 per cent in February.
The dearness allowance, according to the reports, is likely to be increased by a further four percent in July, which would take DA to 38 per cent.
In March, the Union Cabinet approved to increase 3 per cent in dearness allowance (DA) under the 7th Pay Commission, thus taking the DA to 34 per cent of the basic income. Over 50 lakh government employees and 65 lakh pensioners are getting profit from this move.
“The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi, has given its approval to release an additional instalment of dearness allowance (DA) to central government employees and Dearness Relief (DR) to pensioners w.e.f. January 1, 2022, representing an increase of 3 per cent over the existing rate of 31 per cent of the basic pay/ pension, to compensate for price rise,” the Prime Minister’s Office had said in a statement.
The government recently hiked the DA and DR. Since July 2021 when the freeze was lifted, DA and DR have seen three hikes and have almost doubled.
Dearness allowance is given to government employees, while the dearness relief is for pensioners.
The central government had held back three instalments of DA and DR for January 1, 2020; July 1, 2020; and January 1, 2021, in view of the unprecedented situation which arose due to the COVID-19 pandemic. Finance Minister Nirmala Sitharaman has said the holding back of DA and DR saved about Rs 34,402 crore, in a written reply to a query in the Rajya Sabha in August last year.
The central government had in July 2021 increased the DA and DR for the central government employees and pensioners, respectively, to 28 per cent from 17 per cent after a long pause. Again, in October 2021, the central government employees witnessed a jump of 3 per cent in dearness allowance.
Then, the DA for the central government employees rose to 31 per cent, effective from July 2021. Now, from January 2022, DA and DR will be paid to the salaried at a rate of 34 per cent, increasing from the earlier rate of 31 per cent.