7th Pay Commission: Central govt employees to get 28% DA hike, what about DA arrears? Know here

In the cabinet meeting chaired by PM Modi, approval has been given to reinstate the dearness allowance which has been pending for the last one and a half years. Central government employees will now get dearness allowance at the rate of 28%, which till now was 17%. That is, the employees of the central government will now get 11% more dearness allowance.

Due to Corona epidemic, the Central government had frozen dearness allowance of central government employees and dearness relief of pensioners since last year. As of now three instalments of DA were pending- 4% from January 1, 2020 to June 30 2020, 3% from July 1, 2020 to December 31, 2020, 4% from January 1, 2021 to June 30, 2021. These three arrears of dearness allowance will be given to the employees in three installments.

However, the government has not taken any decision regarding the DA increase in July. It is believed that DA may increase by 3 percent in July. If this happens, then the total dearness allowance will be 31%. It is pertinent to mention that it is not yet clear if central government employees will get the hiked DA benefit from September.

With the restoration of DA, central government employees will see a big jump in their take-home salary, provident fund contribution and gratuity as well.

It is still not clear when the government will pay the DA arrears due from January 1, 2020. Payment of arrears will entail a big outflow for the exchequer. For example, the minimum arrear that a Level-1 employee will get is Rs 23,760 (4% of Rs 18,000 for 6 months plus 7% of Rs 18,000 for 6 months plus 11% of Rs 18,000 for 6 months). Similarly, if we add up the arrear amount of all the central government employees and pensioners it will lead to a big outflow for the government.