7th Pay Commission: When can central govt employees expect salary hike?

7th Pay Commission: Salaries of central government employees are expected to go up this year as the Centre is expected to reinstate the 4 per cent Dearness Allowance (DA) hike that was put on hold in 2020. It was earlier reported that the DA hike may be restored as early as January, but the government has not yet formally announced anything yet.

It seems now that a decision on reinstating the additional four percent DA will be taken closer to July 2021. The DA hike was put on hold in April 2020 in the wake of the economic crisis triggered by the deadly coronavirus pandemic.

The Centre had decided to put the DA hike on hold till July 2021. While there are chances that it could be reinstated earlier, a formal confirmation from the government is awaited.

The DA hike is likely to benefit roughly 50 lakh central government employees and over 60 lakh pensioners. As of now, DA is given to central government employees and pensioners at the rate of 17 percent.

Last year, the central government had approved a four percent DA hike in line with the formula, based on recommendations from the 7th Central Pay Commission.

Central government employees and pensioners can expect to receive 21 percent DA starting this year after the government makes a formal announcement to restore the 4 percent additional hike.

Many workers’ associations have urged the government to restore the 4 percent DA hike for eligible employees and pensioners in view of the rising cost of living and inflation.

It is worth mentioning that the central government announced a hike in dearness allowance twice a year to compensate employees and workers for higher costs due to inflation. The four per cent DA hike that has been put on hold was proposed in January 2020 and it was approved in March 2020.

However, it was put on hold a month later in April 2020 as the pandemic depleted government revenues. While central government employees can hope to receive the four per cent DA hike by July, there is no clarity whether the Centre will announce an additional DA hike for this year.