Central Government employees will receive DA hikes from July

A meeting of the National Council of Joint Consultative Machinery (JCM) is fixed with the central government officials. The meeting is fixed for 26th June 2021 and will be chaired by the Cabinet Secretary of India. The meeting was fixed for 8th May 2021, which was postponed due to the corona pandemic.

The agenda points for discussion in this meeting would be to pay the 7th CPC Dearness Allowance (DA) arrears to the central government employees and the 7th CPC Dearness Relief (DR) benefits to the retired employees. 

Last year, due to the coronavirus pandemic, the government had stalled DA and DR of central government employees and pensioners. The three instalments are due on 1st January 2020, 1st July 2020 and 1s January 2021 withheld will be restored from 1st July, but there is no official announcement about the settlement of the three outstanding DAs. Around 1.12 crore employees and pensioners will stand to benefit.

The central government employees receive DA of 17 per cent currently. This is effective from July 2019. A further revision in DA, being due from January 2020, was withheld due to the coronavirus pandemic. The cumulative revised rates of DA will increase from 17 per cent to 28 per cent, which includes a DA hike of 4 per cent in January 2020, 3 per cent in June 2020 and 4 per cent in January 2021.

By holding the three instalments of DA and DR of employees and pensioners, the government has saved Rs.37,530.08 crore. 

The minimum pay to central government employees is Rs.18,000 per month. As per the existing pay matrix, it is expected that 15 per cent DA will be added. The increase in DA would be Rs.2,700 per month. Hence, the central government employees will get a significant annual benefit of Rs.32,400 in DA. The DA for June 2021 is expected to grow by 4 per cent.

The 7th Pay Commission DA instalment talks are likely to resolve the 7th Central Pay Commission matrix issue that has been delaying the implementation of full benefits.

For any clarifications/feedback on the topic, please contact the writer at namita.shah@cleartax.in

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