Good news for Central govt employees: Hike in DA and arrears before Holi

52 lakh central government employees are waiting for the announcement of the Dearness Allowance (DA) hike.

 Since the DA hike is directly related to around 58 lakh central government retired pensioners' Dearness Relief (DR), they are also anxiously waiting for the DA announcement for January to June 2021 period.

Here we list out the net impact on the central government employees' salary and pension of the retired central government servants.

Earlier, due to the COVID-19 pandemic, the Central Government had declared relaxation in the Leave Travel Concession (LTC) Scheme allowing the central government employees to claim income tax benefits on expenses made between October 12, 2020, to March 31, 2021, on purchase of goods and services that attract GST rate of 12 per cent or more instead of travel expenses.

The Central government has also included life insurance in the LTC Scheme among the services mentioned earlier in the DoPT's Office Memorandum (OM).

As the All India Consumer Price Index (AICPI) data is out, Prayagraj-based Harishankar Tiwari of AG Brotherhood said that there is no chance of Centre announcing more than 4 per cent DA for the central government employees as the December 2020 AICPI number is 342 means the average AICPI for the entire 2020 as year stands at 335.

That means the December 2020 AICP has gone down by 3 points leading to a 4 (3+1) per cent DA hike for the central government employees.

Media is a buzz with centre may announce DA restoration while announcing the DA hike due since January 2021.

If that happens, then the existing 17 DA of a central government employee will suddenly zoom at 25 per cent (17 + 4 + 4).

Once the DA restoration is announced, central government employees will witness a steep rise in their monthly salary as their existing DA will shoot up by 8 per cent leading to a rise in their Travel Allowance (TA) with the same percentage points.

Apart from this, due to the freeze in DA since July 2020, central government employees are also expecting the arrears post-DA restoration. However, the central government is yet to make any such announcement in this regard.

As DA is directly linked to DR benefit being given to around 58 lakh central government pensioners.

The DA restoration will lead to a rise in the monthly pension of the retired central government employees too.