7th Pay Commission: 3 BIG gifts to govt employees in July; DA hike, 18-months arrear, PF interest rate

New Delhi: Lakhs of government employees may see an increase in their dearness allowance (DA) next month, in July 2022. The DA is declared twice a year, in January and July.It is expected that the government may consider rising retail inflation into the DA amount for July 2022.

DA announcements are typically made in March and September of each year. However, due to the Coronavirus pandemic, there was no increase or adjustment in the DA amount for one and a half years after December 31, 2019.

Due to the pandemic, the Finance Ministry halted the DA hike from January 2020 to June 30, 2021. The DA hike was reinstated in July of last year.

Following that, DA for all Central Government employees was increased to 28% from 17% in July 2021, based on the recommendations of the 7th Pay Commission.

DA hike of 5% likely in July

According to the All-India Consumer Price Index (AICPI) data thus far this year, central employees are set to receive a large DA boost of 5%. This figure is a percentage point more than the previously predicted 4% increase. If the AICPI data for May continues to rise, this figure might rise to 6%.

With the predicted 5% increase, DA, which is currently at 34% following a 3% increase in January of this year, would rise to 39%. If this rises to 6%, it will be a huge boost in the face of growing inflation in India and around the world. On the basis of the base income of employees, such a raise would represent a rise of up to Rs 3,400 per month, or little more than Rs 40,000 annually.

DA Arrears

The reports on the settlement of 18-month-old Dearness Allowance (DA) arrears have gathered traction once more. According to recent sources, the issue of payment of DA arrears for the period January 2020 to June 2021 may be addressed soon. Employees of the Central Government should not give up hope of receiving Rs 2 lakh in pending arrears in a single payment. The amount of DA arrears would be determined by the employees' pay band and structure.

PF Interest

The EPF, Central Board of Trustees suggested an annual rate of interest of 8.10 percent to be credited on EPF accumulations in members' accounts for the fiscal year 2021-22. The interest rate was officially announced in the government gazette, and EPFO would shortly begin crediting the rate of interest into the accounts of its customers. Every year, EPFO announces the PF interest rate.