The Centre has raised Dearness Allowance (DA) under 7th Pay Commission by 4 percent. This now increases the DA rate from the current 50% to 53% and helps millions of government employees and pensioners. This decision is intended to assist the headed employees and the pensioners to overcome the challenges posed by increase in cost of living and inflation.
Why DA Has Been Increased
The DA is paid to the government employees and pensioners with an intention to maintain their lifestyle along with increasing expenses. The increase is pegged on the All India Consumer Price Index (AICPI). The government reviews DA twice a year in January and July . The increase has been attributed to the current inflation and cost-of-living rise according to the analysts.
How the Hike Affects Salaries
The hike is set based on a basic wages structure of employees. For instance, an employee is paid a basic wage of ₹18,000, earlier they were provided ₹9,000 as DA at the escalation rate of 50%. Earlier when the DA was 50% they are getting ₹9000 now with the enhanced DA to 53% they will receive ₹9530. They also include pensioners who will get an enhancement in Dearness Relief (DR) in addition to the arrears for the last three months.
Possible Increase in Other Allowances
Analysts believe that after DA hiked up other allowances like House Rent Allowance (HRA), Education Allowance & Special Allowance may also be adjusted upward. However there are as yet no official bodies recognising this claim by the government.
Cost Implications of Policies and Programmes
The hike in DA will put pressure on the government to part with extra cash to cater for it. Hence, it is calculated that at state operation it will increase additional expenditure of about ₹500 crore. The decision will have an impact on one lakh and sixty thousand employees and eighty two thousand pensioners across the country.
Let them openly discuss the possibility of 8th Pay Commission.
The 7th Pay Commission has been implemented about 8 years back. Currently, employee unions are for the pay commission known as the 8th Pay Commission. But until now the government has not made any formal statement in this regard.
Correlation between DA and Basic Pay
The raise in DA will not be put together with the base pay. It will remain one more component paid separately. Analysts are convinced that at this time, there will be no integration of DA with basic pay.
The government views this DA hike as a favorable move to meet the financial requirements of employees and pensioners in these very extraordinary conditions.
