Last week, the Union Cabinet had approved an 11 percentage point hike in dearness allowance and dearness relief for central government employees and pensioners, following which the new DA rate is 28 per cet. The finance ministry on Tuesday has issued an order to implement the recent Cabinet decision to hike the dearness allowance of the government employees from 17 per cent to 28 per cent from July 1. Over 48 lakh central government employees and 65 lakh pensioners will benefit from the decision as the rate of teh allowance was not revised owing to the pandemic. “These orders shall also apply to the civilian employees paid from the Defence Services Estimates,” it said, adding that for Armed Forces personnel and Railway employees, separate orders will be issued by the respective ministries.
Central government employees will receive the increased DA in their July salary in the starting of August. The July salary of the central government employees is likely to see a hike in house rent allowance as well, as according to an earlier order of the government, the house rent allowance would increase when the DA exceeds 25 per cent of the basic pay. The order linking the DA with the HRA was passed in 2017. Now that the DA forms 28% of the basic pay, central government employees are expecting a hike in the HRA as well, which varies from one city to another, depending in whether the residence of the central government employees fall under X,Y and Z categories.
The allowance rate is generally revised twice a year in January and July but the revision was stalled owing to the pandemic. The hike of 11 per cent point comes taking into account all these revisions that were halted. The Cabinet also announced that there will be no arrear as the DA rate from January 1, 2020 to June 30, 2021 will be considered at 17 per cent, the rate at which the government employees received their DA alonwith their monthly salary.
Get our daily newsletter
Thank you for subscribing to our daily newsletter.
News Highlights Business
- The Ministry of Finance issues an order in 28% DA, RD as of July 1
- Check all news and articles from the Business news updates.