Good News! Big gift to employees before thus month, bumper jump in salary, big update on arrears, check details

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The Central Government on Thursday approved a hike of 3 percentage points from 28% on Dearness Allowance (DA) and Dearness Relief (DR) for 7th pay commission employees and pensioners of the Central Government. After this hike, the DA will increase to 31 per cent. Addressing the media, Union Minister Anurag Thakur said that this hike is effective from July 1, 2021. With this, 47 lakh employees and 68.62 lakh pensioners have been given a big gift before Diwali. The DA of central employees has increased to 31%.



The new hike comes a few days before Diwali and is aimed at benefiting over 47 lakh employees and 68.62 lakh pensioners. The combined impact on the exchequer on account of both dearness allowance and dearness relief would be Rs 9,488.70 crore per annum, the government said in a statement.

Earlier in the day, the Union Cabinet approved 3 per cent Dearness Allowance (DA) and Dearness Relief (DR) hike for central government employees and pensioners. The Union Cabinet had approved the DA and DR hike after a meeting held earlier in the day. This is a welcome step for the Central Government employees and pensioners.

Though the DA was recently reinstated, the central government is yet to pay the enhanced Dearness Allowance (DA) for the months of July and August 2021. Even though DA was restored recently, the central government is yet to pay the enhanced Dearness Allowance (DA) for the months of July and August 2021. The government had recently said that employees will get salary with increased DA from July 2021.

DA was increased by 28% in July 2021

Prime Minister Narendra Modi in July 2021 decided to increase the Dearness Allowance (DA) and Dearness Relief (DR) given to government employees and pensioners from 17% to 28% respectively, led by the government at the Centre. The new enhanced DA and DR came into effect from July 1. It is to be noted that the DA hike for the period January 2020 to June 2021 was stopped in 2020 due to the outbreak of Corona.

Computation of gratuity, leave encashment and other retirement benefits applicable 

The DA hike, however, was not given retrospectively and that is why central government employees retiring between January 2020 and June 2021 were confused about the DA rate that would be applicable for computing their gratuity, leave encashment and other retirement benefits .



To put an end to the confusion, the Union Finance Ministry has recently released the details related to calculation of gratuity and leave encashment for Central Government employees retiring between January 2020 to June 2021. The government has also notified the amount of DA that the Center will consider for computing gratuity and leave encashment.

Decision to increase HRA by 3% also

Later, the Center also decided to increase the House Rent Allowance (HRA) of central government employees from August 2021. While issuing the order, the Center had said that DA and HRA of central government employees should be increased on the basis of their basic salary. As per the rules framed by the Centre, the HRA will be increased by 3 per cent if the DA employee’s basic pay exceeds 25 per cent. The Department of Expenditure had issued an order in 2017 saying that when DA exceeds 25%, HRA will be automatically revised.

According to the order of the government, the HRA is divided into three categories according to the cities – X, Y and Z. After revision, the HRA for X category cities will be 27% of the basic pay, similarly HRA for Y category cities. Will happen. 18 percent of the basic pay while for Z category cities it will be 9 percent of the basic pay.

salary will increase

According to the 7th Pay Commission Pay Matrix, the minimum basic pay of central government employees is Rs 20,000. On this basic salary of Rs 18,000, central government employees were getting DA of Rs 3400 at the rate of 17 per cent till June 2021. From July 2021, central government employees have started getting Rs 6200 per month at the rate of 31 per cent DA. That is, the monthly salary of the employees has increased by Rs 2800. Under this, the pension of the pensioners will also be decided.


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