7th Pay Commission: Crucial meet on DA, DR arrear benefits on Saturday, increased salary coming from July 1

A meeting between Central government servants' (CGS') representative body National Council of JCM, officials from the Department of Personnel & Training (DoPT) and Ministry of Finance has been scheduled for this Saturday.

New Delhi: Lakhs of central government employees who have been eagerly waiting for hike in the Dearness Allowance (DA) will get revised salary from July 1. The government has already said in Parliament that their stalled dearness allowance (DA) and dearness relief (DR) will be resumed from 1 July 2021. Meanwhile, on the arrear front, a meeting between Central government servants' (CGS') representative body National Council of JCM, officials from the Department of Personnel & Training (DoPT) and Ministry of Finance has been scheduled for June 26.

A Live Mint report had confirmed the above date for the meeting. This gives ample hint on the arrears benefits on Dearness Allowance (DA) and Dearness Relief (DR). 

Last year, due to Corona, the government had withheld dearness allowance (DA) and dearness relief (DR) of employees and pensioners, which is all set to be released this time. The decision now to restore DA from July, 2021 would benefit about 50 lakh central government employees and more than 65 lakh pensioners. However, any increase in DA from July 1 will only be effective from that day, meaning the employees would not get any arrears on non-revision of DA for previous period. Therefore the meeting to be held on June 26 between the above two parties will decide on the arrear benefits of DA and DR under the recommendation of the 7th Pay Commission for the government employees and pensioners.

The dearness allowance, which is currently available at the rate of 17 per cent, can be increased by 11 per cent, taking the total percentage hike to 28 percent straight. According to the All India Consumer Price Index (AICPI) data release, between January and June 2021, at least DA can be increased by 4 percent, media reports have said. The reports further mention that after the DA is reinstated, the Dearness Allowance of the central employees may increase from 17 percent to 28 percent. This includes a 3 percent increase in DA from January to June 2020, a 4 percent increase from July to December 2020, and a 4 percent increase from January to June 2021. That means the total DA calculation will be (17 + 4 + 3 + 4) 28 percent.

Currently the minimum salary according to the pay matrix of central employees is Rs 18000. On the existing pay matrix, a 15 percent dearness allowance is expected to be added. Hence, on the existing pay matrix, Rs 2,700 per month will be directly added to the salary as DA. Thus, on annual basis, the total dearness allowance will increase by Rs 32400.

As per some previous media reports, the central government employees must keep in mind 7th CPC Fitment Factor of 2.57 while calculating the probable hike in monthly salary. This means as per the 7th Pay Commission Fitment Factor, if an employee draws a monthly basic salary of Rs 20,000 then one's monthly 7th CPC salary hike will be Rs 51,400 (Rs 20,000 x 2.57).