2024-03-06 21:00:48
New Delhi: There is good news for central government employees. Their Dearness Allowance (DA) may increase up to 50%. This is revealed by Labor Bureau data. This bureau is under the Ministry of Labour. The latest data of Consumer Price Index for Industrial Workers (CPI-IW) points to this. Central government employees are eagerly waiting for their next Dearness Allowance (DA) increase. DA is a component of the salary of central government employees. Its purpose is to reduce the effect of inflation. If DA reaches 50 percent, it will also increase other allowances and salary components. In this way there will be a decent increase in salary. The 7th Central Pay Commission gives detailed information about how 50 percent DA will increase the salary. Now if DA reaches 50 percent, then many allowances and salary components will also increase. These include House Rent Allowance (HRA), Children’s Education Allowance, Child Care Allowance, Hostel Subsidy, Travel Allowance (TA) on transfer, Gratuity Ceiling, Dress Allowance, Mileage Allowance and Daily Allowance.
Understand the complete calculation
For example, HRA is currently based on the location of central government employees. As per the 7th Pay Commission, HRA rates for Class X, Y and Z cities have been 24%, 16% and 8% of basic pay with effect from July 1, 2017. When DA reached 25%, the HRA rates in cities X, Y and Z as recommended by the 7th Pay Commission were revised to 27%, 18% and 9% of the basic pay.
It is now suggested that when DA reaches 50%, HRA rates in cities X, Y and Z should be reduced to 30%, 20% and 10% of basic pay. This means that HRA for cities X, Y and Z will change to 30%, 20% and 10%.
According to the 7th Pay Commission, every time DA reaches 50%, the children’s education allowance will also increase by 25%. Similarly, once DA reaches 50%, other components like special allowance for child care, gratuity ceiling, dress allowance and daily allowance allowance will be increased by 25%.
According to experts, these allowances are linked to DA. Hence, when DA increases, these also increase. This helps the employees to cope with inflation. The purpose of these changes is to adjust with the increasing cost of lifestyle. Also, proper compensation has to be given to government employees.
There is no automatic merger of DA and basic salary.
It is also important to note that DA is not automatically added to the basic salary even after crossing the 50% limit. The 7th Pay Commission report did not suggest such a measure. In 2014, the Central Government implemented the recommendation of the 5th Central Pay Commission. In this, it was recommended to add 50% dearness allowance to the basic salary. This affected both employees and pensioners.
However, the Sixth Pay Commission did not advocate such a merger. Instead it introduced the concept of staggering pay revisions to a fixed 10-year cycle and linking them to DA/DR crossing 50% of basic pay. This approach has been consistently maintained by the last three Central Pay Commissions. It emphasizes that future pay revisions should take place when DA/DR reaches or exceeds 50% of the basic pay. This will reduce the adverse effects of inflation.