7th Pay Commission news: DA restoration, salary hike, arrears, DR benefits - Latest updates

Dearness Allowance (DA) is a component of salary of government employees and pensioners and it is provided to help the employees bear the impact of inflation.

It is to be noted that DA is directly related to cost of living and this is the reason why it varies from employee to employee based on their posting in urban sector, semi-urban sector or the rural sector.

DA is revised twice every year – in January and July. In 2006, the Centre decided to change the formula to calculate the dearness allowance for central government employees and pensioners.

For the central government employees: Dearness Allowance % = ((Average of All-India Consumer Price Index (Base Year 2001=100) for the past 12 months -115.76)/115.76)*100

For Central public sector employees: Dearness Allowance % = ((Average of All-India Consumer Price Index (Base Year 2001=100) for the past 3 months -126.33)/126.33)*100

The DA of Central government employees is 17 per cent, which has been effective from July 2019. In April 2020, the Centre decided to freeze DA due to COVID-19 pandemic. 

The Centre also announced that no arrears will be paid from January 1, 2020, to June 30, 2021 but it was said by the Centre that any hike in DA due to revision on July 1, 2021, will take into account the previous hikes as well. Notably, the DA of the central government employees was raised by 4 per cent in January 2020, by 3 per cent in June 2020 and by 4 per cent in January this year.