7th pay commission news: From July 2021, the government has agreed to restore the pending DA. Central Government Employees will soon get full DA benefits, according to the Narendra Modi government. Anurag Thakur, Minister of State for Finance, stated this in a written reply to the Rajya Sabha. From July 1, 2021, central government employees will get full DA benefits, according to the Minister for states for Finance (MoS). As a result, central government employees have been looking forward to receiving the Dearness Allowance (DA), which has been pending since January 2021. The government had halted three installments of DA and for central government employees and DR (Dearness Relief) for pensioners due on January 1, 2020, July 1, 2020, and January 1, 2021 due to the COVID-19 pandemic. The decision allowed the government to save Rs 37,430.08 crore and let them cope with the catastrophe.
DA hike impact on 7th Pay Commission Matrix
As the center has declared to subsume all three pending DA installments from 1st July 2021, a central government employee’s DA is expected to jump from existing 17 per cent to 28 per cent. This includes 3 per cent DA hike effective from 1st January 2020, 4 per cent DA hike effective from 1st July 2020 and expected 4 per cent DA hike due from 1st January 2021.
7th Pay Commission fitment factor
As per the Seventh Pay Commission rules, a central government employee’s salary is divided in three parts — basic salary, allowances and deductibles. Net CTC is a central government employee is summation of basic salary multiplied by the 7th CPC fitment factor plus all allowances. However, net salary is difference of Net CTC and deductibles like PF contribution, Gratuity, etc.
Since, 7th pay commission fitment factor is 2.57. A central government employee’s CTC other than allowance is a multiple of basic salary with 2.57. Suppose, a central government employees basic monthly salary is ₹20,000. In that case, that central government employee’s monthly CTC other than allowance will be ₹51,400 ( ₹20,000 x 2.57).
Now comes other part of CTC means allowance. This allowance includes Dearness Allowance (DA), Travel Allowance (TA), House Rent Allowance (TA), medical reimbursement, etc. Since, DA may rise from 17 per cent to 28 per cent from 1st July 2021, a central government will be eligible for 28 per cent DA, which is calculated on the basis of one’s basic salary. Similarly, one’s Travel Allowance (TA) will rise in sync with the DA. so, one’s TA will also rise. So, after the rise in DA, a central government employee’s allowance is also going to increase. So, this expected rise in DA of a central government employee is going to result in big leap in one’s monthly salary. apart from that, three installments of DA arrears are also going to do icing on the cake for CGS.
So, DA restoration is going to change 7th CPC pay matrix of a central government employee and the change is positive for them.