7th Pay Commission new update –In what could be called a bumper festive bonanza for lakhs of Central government employees, the Union Cabinet last week approved a 3 percent dearness allowance (DA) and dearness relief (DR) hike, which will benefit over 47.14 lakh Central government employees and 68.62 lakh pensioners. 

The department of expenditure under the Ministry of Finance has yesterday declared a revision of the rate of Dearness Allowance (DA) to Central Government Employees (CGS) due from 01.07.2021. The Finance Ministry has raised the DA rate due to Central Government employees from 28% to 31% and the new rate will go into effect on July 1, 2021, according to the notification issued by DoE on 25th October 2021. The department has further added in a statement that “the President is pleased to decide that the Dearness Allowance payable to Central Government employees shall be enhanced from the existing rate of 28% to 31% of the Basic Pay with effect from 1st July 2021.”

“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,” it added.

The decision to increase DA and DR rates will benefit about 47.14 lakh Central Government employees and 68.62 lakh, pensioners.

7th Pay Commission new update: How much additional salary do Central Government Servants (CGS) may get?

As per the 7th Pay Commission Matrix, the basic pay of Level-1 employees ranges from Rs 18,000 to Rs 56,900. Let us do the calculation based on the minimum basic pay of Rs 18,000. 

So, assuming that the basic pay is = Rs 20,000 per month

DA as per revised rate of 31% of Rs 20,000 = Rs 6,200

DA as per revised rate of 28% of Rs 20,000 = Rs 5,600

Difference in payment after latest DA hike i.e, revised rate of 31% = Rs 600 more per month 

Yearly Difference in payment after latest DA hike i.e, revised rate of 31% = Rs 7,200.