7th Pay Commission DA hike: Here’s how much salary you will get after 3% increase

New Delhi: In the latest 7th Pay Commission update, the Central government has approved a 3 per cent hike in the dearness allowance (DA) and dearness relief (DR) for Central government employees and pensioners. The latest DA and DR hike has come amid the festive season that will add to the festivities for lakhs of Central government employees and pensioners. 

Overall, the latest decision to increase the DA will benefit 47.14 lakh Central government employees and 68.62 lakh pensioners. With the latest increase, the DA and DR will now be paid at a rate of 31% of the basic pay and pension, respectively. 

Previously, the government was paying DA and DR at a rate of 28% of the basic and pension, respectively. The decision to increase the DA by 3% will cost the exchequer Rs 9,488.70 crore per annum.

In the official statement, the government said that the Union Cabinet, chaired by Prime Minister Shri Narendra Modi, has approved to release of an additional instalment of Dearness Allowance to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 1.7.2021 representing an increase of 3% over the existing rate of 28% of the Basic Pay / Pension, to compensate for price rise. 

“This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission.  The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be Rs.9,488.70 crore per annum. This will benefit about 47.14 lakh Central Government employees and 68.62 lakh pensioners," the official release added.

7th Pay Commission DA hike: Here’s how to calculate a salary hike 

With the latest 3% increase in DA and DR, the Central government employees and pensioners’ salaries and pensions are all set to increase. The new DA and DR will be paid at a rate of 31% of their basic pay and pension. Also Read: Rakesh Jhunjhunwala Portfolio: Big bull raises stake in THIS stock, are you investing?

So, to calculate their salary and pension hikes, employees and pensioners need to calculate the 3% of their basic pay. For instance, if the basic salary of an individual is Rs 18,000, then his or her monthly salary or pension will increase by Rs 540. Overall, the DA at 31% rate will be about Rs 5580 in this case. Also Read: MG Astor mid-size SUV sold out for 2021, New bookings to open from November 1