Central Government Employees to Receive Big Salary Hike, Thanks to DA Increase
Central government employees in India have reason to rejoice as they are set to receive a significant increase in their salaries soon. This is due to the dearness allowance (DA) hike announced by the government. The DA hike will result in an increase of Rs 9000 per month in their salaries. Here’s what you need to know about this development.
Rules Regarding Dearness Allowance
Central employees receive a DA increase every six months, and they are currently receiving a DA at the rate of 42%. The next DA increase is set to take place in July 2023, with an estimated increase of 4%. This will bring the DA to 46%. However, a rule made by the government in 2016 stipulates that as soon as the DA reaches 50%, it will be reduced to zero.
Basic Salary Increase Formula
The government implemented the 7th Pay Commission in 2016, which resulted in a zero DA. A new base year was set for salary calculation, and employees received the benefit of the previous DA added to their basic salary. With the current DA hike, the plan is to merge the DA with the basic salary and then reduce the DA to zero, resulting in a significant increase in the basic salary.
Will Dearness Allowance Be Reduced to Zero?
The memorandum of 2016 states that as soon as the DA reaches 50%, it will be reduced to zero. This means that the current DA of 42% will start back from 1% or 2%. The employees will not have to wait long for their salary revision, which used to exceed 100% under the old formula.
Salary of Central Employees to Increase by Rs 9000
The current basic salary of pay-bed level-1 is Rs 18000, and the calculation for the DA is Rs 7560. With a 50% DA, the calculation will result in Rs 9000. As soon as the DA reaches 50%, it will be reduced to zero and added to the basic salary, resulting in an increase of Rs 9000 in the salary.
When Will Central Employees Receive the Salary Hike?
The next DA revision is set to take place in July 2023, with an estimated increase of 4%. If the DA increases by 4% in January 2024, the DA will reach 50%, and it will be reduced to zero. If it increases by 3%, it will be 49%. In case of 50%, the DA will become zero from January 2024 itself, and the dearness allowance will be calculated only on the increased basic salary from July 2024.
Why Is Dearness Allowance Reduced to Zero?
When a new pay scale is implemented, the DA received by the employees is added to the basic salary. However, as a rule, 100% DA received by the employees should be added to the basic salary, but this is not possible due to financial constraints. The government made the decision to reduce the DA to zero in 2016 to avoid this issue.
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Sorted points by DelhiBreakings.com team.
👉 DA Hike: Central employees to get a big jump in their salary, increasing by Rs 9000/month
👉 Rules made by the central government in 2016 will come into force to increase the salary
👉 Dearness allowance of central employees increases every six months and is currently at 42%
👉 Next increase estimated to be 4% in July 2023, reaching 46%
👉 As per the 2016 rule, DA will be reduced to zero once it reaches 50%
👉 New base year fixed for calculation after implementation of 7th Pay Commission in 2016
👉 Plan to increase salary by merging DA with basic salary and reducing DA to zero
👉 Salary of central employees to increase by Rs 9000, reaching Rs 27000
👉 DA to be calculated on increased basic salary after reduction to zero
👉 Revision of DA for January 2024 to be monitored for reaching 50%
👉 If DA reaches 50%, it will be reduced to zero from January 2024
👉 Financial condition comes in the way of adding 100% DA to basic salary
👉 In 2006, entire DA was merged with basic pay when sixth pay scale was implemented.
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