7th Pay Commission: Fulfilling a long-pending demand of the employees, the Union Cabinet has reportedly approved 4 per cent increase in Dearness Allowance (DA) for Central government employees under the 7th Pay Commission. "The Union Cabinet has approved an increase of 4 per cent Dearness Allowance to Central government employees and dearness relief to pensioners with effect from 1st January, 2020. This is over the existing rate of 17 per cent of the Basic Pay/Pension," Union Minister Prakash Javadekar said.
The move will raise the salaries of all centre government employees. Minister of State for Finance Anurag Thakur, in a written reply in the Rajya Sabha last week, had said DA and DR of Central government employees under the 7th Pay Commission had been due from January 1.
"Dearness Allowance and Dearness Relief are granted to serving employees and pensioners of the Central Government respectively each year with effect from 1st January and 1st July and normally paid in March and September, respectively," he stated.
He added the DA was calculated based on a rise in inflation and essential commodities' price. The government takes into account the All India Consumer Price Index for Industrial Workers for calculating for calculating DA/DR, he added.
For instance, the January-June DA is announced based on inflation from July to December in the previous year whereas July to December DA is announced based on the inflation rate from January to June in the same year.
The DA, which is a cost of living adjustment allowance paid to government employees and pensioners to offset the impact of inflation, is announced twice a year with its duration being from January to June and July to December every year. The central government employees and other staffers across various states are paid as per the 7th Pay Commission.