7th Pay Commission: Salary to be hiked automatically when DA rises above 50%

New Delhi: The latest news on dearness allowance (DA) hike has given fresh impetus to lakhs of central government employees who are eagerly waiting for hiked pay in their basic pay under 7th Pay Commission.

However, if reports are to be believd, the government may bring out a mechanism wherein the pay will automatically rise when DA rises above 50 percent. And to implement the mechanism, reports have said that the government may not appoint any pay commission further.

The department of expenditure will reportedly submit a report in this context to the Finance Minister Arun Jaitley soon.

While approving the recommendations of the 7th CPC on 29th June, 2016, the Cabinet had decided to set up the Committee on Allowances (CoA) in view of substantial changes in the existing provisions and a number of representations received.

The modifications are based on suggestions made by the CoA in its Report submitted to Finance Minister on 27th April, 2017 and the Empowered Committee of Secretaries set up to screen the recommendations of 7th CPC.

"7th CPC had also recommended that HRA rates will be revised upwards in two phases to 27%, 18% and 9% when DA crosses 50% and to 30%, 20% and 10% when DA crosses 100%. Keeping in view the current inflation trends, the Government has decided that these rates will be revised upwards when DA crosses 25% and 50% respectively. This will benefit all employees who do not reside in government accommodation and get HRA," as per govt statement.

The Union Cabinet this week increased the dearness allowance (DA) for its 11 million employees and pensioners to 7 percent, from 5 percent, from January 1, 2018.

This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission.

Government has said that the hike will benefit about 48.41 lakh central government employees and 61.17 lakh pensioners.

It said that the combined impact on the exchequer on account of both DA and DR would be Rs 6,077.72 crore per annum, and Rs 7,090.68 crore in 2018-19 (for a period of 14 months from January, 2018 to February, 2019).