7th CPC: These state govt employees get DA hike; Centre may raise Dearness Allowance before Holi
Madhya Pradesh on Saturday announced a Dearness Allowance (DA) hike of 11 percent to 31 percent for the state government employees. The new rate of Dearness Allowance will come in effect from April. Earlier, the state government employees were getting DA at the rate of 20 percent of their basic salary.
Two days ahead of the budget session of Madhya Pradesh Assembly, Chief Minister Shivraj Singh Chouhan said “Due to coronavirus, we could not hike the DA of state government employees. But now it will be hiked to 31 percent and disbursed from April.” According to officials, the state government’s decision will benefit nearly 7 lakh employees.
Earlier, Congress MLA Jaivardhan Singh had said that it will raise the demand of restoration of the old pension scheme in the coming session.
According to reports, the central government employees are also expected to receive a DA raise ahead of Holi. If the government announces an increase in DA by 3 percent then central government employees will get the allowance at the rate of 34 percent. Currently, they are getting DA at 31 percent of their basic salary. These employees may also get arrears of the previous two months along with the March salary. A raise in the Dearness Allowance will benefit more than 1 crore central employees and pensioners.
Dearness Allowance, which is provided to offset the impact of inflation, constitutes a major portion of central government employees’ salary.
Under 7th Pay Commission (7th CPC), central government revises DA twice a year – January and July. Employees DA varies based on government employees’ locations- whether they are located in urban, semi-urban or the rural sector.
Last year in October, despite COVID pandemic the government had increased central government employees’ Dearness Allowance from 28 percent to 31 percent.
Under 7th Pay Commission, central government employees’ Dearness Allowance is calculated as:
Dearness Allowance percentage = ((Average of AICPI (Base Year 2001=100) for the past 12 months -115.76)/115.76) x 100. Here, AICPI stands for All-India Consumer Price Index.