DA hike: How much will your salary increase? 10 points

As the government has clarified, central government employees will get no arrear for the period between January 2020 and June 2021.

The Cabinet on Wednesday approved a 28 per cent Dearness Allowance to the central government employees and Dearness Relief for pensioners. The decision will benefit around 1.14 crore employees and pensioners, information and broadcasting minister Anurag Thakur said.

Information and broadcasting minister Anurag Thakur announced 28 per cent DA and DR benefits for central government employees starting from July. (PTI)

DA Hike calculation

At present, the government employees are getting a 17% dearness allowance. For example, if a government employee's basic salary is ₹18,000, the DA is ₹3,060. With 28%, the dearness allowance will be 5,040 in a month. This calculation will be applicable from July 1.

Here are 10 things to know about the DA hike:

1. The DA and DR rates have been increased by 11 per cent point because three instalments of DA and DR were kept frozen because of the pandemic situation.

2. Dearness Allowance is a component of the salary that cushions against inflation and is revised twice a year -- once in January and once in July.

3. The increase in the DA and DR will impose an annual burden of ₹34,401 crore on the exchequer, Anurag Thakur said.

4. For this financial year, the hike will cost the exchequer ₹22,934.56 crore from July to February.

5. The hiked DA will be restored in July, which means government employees are likely to receive a 28% DA of their basic pay in this month's salary.

6. The minister also mentioned that the rate of DA and DR will remain 17% for the period of January 1, 2020, to June 30, 2021.

7. This means that the central government employees will not get any dues as they have been receiving the DA at a 17% rate.

8. In March 2020, a decision was taken to increase the DA rate by 4%. It was said that the increased 21% DA will be applicable retrospectively from January 2020. But owing to the pandemic, the implementation of the 21% DA was stalled and central government employees continued to get their 17% DA.

9. The Dearness Allowance was not revised in July 2020 and January 2021. The 28% hike takes into account all these revisions that could not be done.

10. But the government has made it clear that the 28% hike will take effect on July salary and there will be no arrear for the period of January 2020- June 2021, which means the 4% hike that was announced last year has become nullified.