DA Hike: Salary of central govt staff up 11%, what will be the impact on HRA? Are employees happy?

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The wallets of central government employees and pensioners will be heavier after the 11% DA hike. The salary for July salary will bring some cheer to them. Around 48 lakh central government employees and 65 lakh pensioners will receive an increment in their July salary. Dearness allowance and dearness relief (DA/DR) increases which were frozen since January 2020 are being restored from July 2021 salary. Central government employees were getting their remuneration on the basis of 17% DA/DR from January 2020. Due to the freeze on the instalments of January 2020, July 2020 and January 2021, the hike of 11% was withheld. Now it is being restored but the arrears of the last 18 months are not being paid. The decision on the instalment of DA for July 2021 will be taken by September and it will be rolled out before Dussehra along with July arrears.

HRA will also increase along with DA

With the increase in DA, the house rent allowance of central government employees will also increase. According to the rules of the seventh pay commission, if the dearness allowance crosses 25%, the HRA will also increase according to the catgory of city they reside in. HRA will increase by 3% for those living in X-group cities, 2% for those living in Y-group cities and 1% for those living in Z-group cities. The HRA will increase from 24% to 27% for X-group cities, from 16% to 18% for Y and from 8% to 9% for Z-category.

Money9 spoke to Shiv Gopal Mishra, Secretary (Staff side) , National Council- Joint Consultative Machinery.

Q: How satisfied are you with this step of DA restoration?

Shiv Gopal Mishra: We were waiting for this for a long time. This news has brought a big relief for the central government employees and pensioners in the midst of rising inflation. This victory belongs to the working class of the country.

Q: What about arrears of the 18 months?

Mishra: It is not that we have not raised our concern over arrears. The National Council of JCM has discussed this with government and we have not closed the chapter. Our demand for arrears still stands.

Q: What will be the increase in salary and pension?

Mishra:  With these three instalments, there will be an increase of 11% in the salary of employees and pension of retired people, which together will make dearness allowance 28%.

Q: Those who retired during January 2020 to June 2021 are at a loss as all their final calculation is being done on 17% DA?

Mishra: We are talking about the people who retired between January 2020 and June 2021, the government will definitely compensate them.

Q: The government is under financial pressure, so do you think the demand for arrears will be met?

Mishra:  In view of the financial pressure of the government, we are suggesting to the government that our arrears should be deposited in PF or government bonds should be given.