Superb news for Central employees and pensioners
The central government has recently given nod to raise Dearness Allowance (DA) under the recommendations of the 7th Pay Commission for its employees and pensioners. The new hysteria which began from July 1, 2024, will also apply to the employees coming under the 5th and 6th Pay Commission. They said the Finance Ministry has agreed that arrears for the increased DA will be paid from the implementation date.
What is meant by the term Dearness Allowance (DA)?
Dearness Allowance is an extra amount being provided to the Government servants and pensioners to cover the increasing cost of living. This is adjusted semesters, in the beginning of each year and July particularly having regard to inflation rates and CPI. The objective of DA is meant to help sustain the buying power of employees due to rising prices.
New DA Rates Under the 7th Pay Commission
The government has hiked DA by 3%, taking the current ratio from 50% to 53% of the 7th Pay Commission basic salary for employees. Those under the 6th Pay Commission will receive a new DA rate of 246% while those under 5th Pay Commission will have a new DA of 455%.
For instance, an employee under the 7th Pay Commission earns ₹1 lakh per month; their DA will rise by ₹3,000, making it ₹53,000.
How is DA Calculated?
Like mentioned before DA is computed base on an employee’s basic salary. For example an employee getting 6th Pay commission of a basic pay of ₹ 43,000 will now get DA of ₹ 1,05,780 at new rate of 246%. Earlier this amount was ₹1,02,770 when DA was 239%. It elevates the figure that shall be received by the employee allowing a direct increase in the proportional supplement accordingly.
Arrears Payment for Employees
The new adjusted DA rates were implemented on July 1, 2024 and this means that the employees are free to ask for their arrears in range from July 1, 2024 onwards. The Finance Ministry of this country declared this update through an official memorandum on 7th November, 2024. The arrears will help to release additional resources to support the employees and pensioners.
Why the Increase in DA?
DA rise on addresses the concern of inflation rates by offering compensation on employees living standard expenses. The Finance Ministry insisted that this measures are directed at the reduction of the financial burden within the central employees and pensions. It helps them maintain that ability to make the same quantity of purchases even when the prices are on the rise.
