7th Pay Commission: The central government is likely to announce a 3 per cent DA hike next month. With this 3 per cent likely hike in September, the total dearness allowance will reach 53 per cent. However, the government is unlikely to release the 18-month arrears for DA and dearness relief (DR) that were halted during the COVID-19 pandemic.
In the monsoon session of Parliament, two members recently asked queries regarding the government’s decision on the DA arrears. To a question ‘Whether the government is actively considering to release an 18-month dearness allowance/ relief of central government employees/ pensioners which were withheld during COVID outbreak’, Minister of State for Finance Pankaj Chaudhary replied, “No”.
He added that, “The decision to freeze three installments of Dearness Allowance {(DA)/Dearness Relief (DR) to Central Government employees/pensioners due from 01.01.2020, 01.07.2020 & 01.01.2021 was taken in the context of COVID-19, which caused economic disruption, to ease pressure on Government finances… As the adverse financial impact of the pandemic in 2020 and the financing of welfare measures taken by the Government had a fiscal spillover beyond FY 2020-21, arrears of DA/DR were not considered feasible.”
However, the central government is likely to announce a 3 per cent hike in dearness allowance (DA) and dearness relief (DR) in September 2024, which will become effective from July 1, 2024.
The DA will also not be merged with the basic pay even as it rises beyond 50 per cent. It will continue as it is until the 8th Pay Commission is formed. Instead of the merger, there are provisions of increasing allowances, including HRA, in case of DA crossing 50 per cent, which has already been increased, according to the people in the know of the matter.
DA is given to government employees, while DR is given to pensioners. DA and DR are hiked twice a year, with effect from January and July.
In the previous hike in March 2024, the central government had raised dearness allowance by 4 per cent to 50 per cent of the basic pay. The government has also increased dearness relief (DR) by 4 per cent.
On the 8th Pay Commission, in July, the Confederation of Central Govt Employees and Workers has made several demands ahead of the Budget 2024, including the immediate constitution of the 8th Pay Commission and restoring the old pension scheme.
Minister of State for Finance Pankaj Chaudhary said in a written reply in the Rajya Sabha on July 30 said, “Two representations have been received for constitution of the 8th Central Pay Commission in June 2024. No such proposal is under consideration of the government, at present”
However, according to a Financial Express report, the minimum salary for the central government employees will likely increase to Rs 34,560 with a fitment factor of 1.92, compared with the current minimum salary of Rs 18,000. Likewise, the minimum pension is also expected to be fixed at Rs 17,280.
In the 7th Pay Commission, the salaries were increased by 14.27 per cent in 2016. However, in the previous 6th Pay Commission, the salaries for the central government employees saw a massive 54 per cent jump in 2006.
The 7th Pay Commission was constituted in February 2014. Its recommendations were implemented from January 1, 2016. Usually, the pay commission is constituted by the Central Government every 10 years to revise the remuneration of government employees.
However, so far, there is no proposal within the government for the constitution of the 8th Pay Commission.
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