The New Year is bringing in some good news for Central Government employees. Their salaries are likely to increase in 2021 as the Centre is expected to reinstate the 4% Dearness Allowance (DA) hike which has been on hold since last year due to the economic downturn caused by the COVID-19 pandemic.
Several reports have indicated that the government could start awarding the 4% hike in DA from January. However, the Centre still has not made any official announcement regarding the DA hike. Currently, the DA for Central Government employees stands at 17% as it had halted the promised 4% hike till July 2021. The 4% DA hike was expected in accordance with the formula which is based on recommendations from the 7th Central Pay Commission.
While the chances are high that the DA hike would be implemented by the Centre as the economic situation in the country improves, an official confirmation is still awaited, according to India Today
Government employees are hopeful that their DA would be increased after July 1, 2021. For active workers, their salary will increase after the hike is implemented while retired employees will see an increase in their pension amount.
Centre usually hikes DA twice a year to compensate its employees for price incenses and also inflation. The last proposal to hike the DA by four per cent was floated in January 2020, and the Union Cabinet had approved the hike in March 2020.
The Dearness Allowance hike came as a major relief for nearly 50 lakh employees and over 60 lakh pensioners. However, Centre salary and pension recipients did not get the hiked DA due to the economic instability caused by the coronavirus pandemic.
Meanwhile, the government had also decided to extend the Disability Compensation for all currently serving employees, including those who are covered under the National Pension System (NPS). Union Minister Jitendra Singh had made the announcement on January 1.
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