7th Pay Commission: The Central government employees, who have been waiting for a hike in the fitment factor, are yet to get a word from the government over their demands. However, the Narendra Modi government has announced a pay hike decision which will benefit around 48.41 lakh Central Government employees and 62.03 lakh pensioners. This means, over 1.10 crore central workforce will be getting more money into their wallets.
The Union Cabinet chaired by Prime Minister Narendra Modi has given its approval to the release of an additional installment of Dearness Allowance (DA) to Central Government employees, and Dearness Relief (DR) to pensioners w.e.f. 1.1.2019 representing an increase of 3% over the existing rate of 9% of the Basic Pay/Pension, to compensate for price rise. This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission.
Since the hike comes into effect retrospectively from January 1, the employees will also get arrear for the month of January. Now, the central government employees and pensioner will get Dearness Allowances at the rate of 12 per cent.
7th Pay Commission: The combined impact on the exchequer on account of both DA and DR would be Rs 9168.12 crore per annum and Rs 10696.14 crore in the FY 2019-20 (for a period of 14 months from January 2019 to February, 2020).
7th Pay Commission: The current hike in Dearness Allowance is the third hike by the Centre within a span of one year. Earlier, the Centre had increased DA by 2% to 7% in March, 2018. The second hike followed in August, 2018 when the DA was hiked by another 2% to 9%.
The Central government employees get their salaries as per the fitment factor of 2.57 times which has set the minimum basic salary to Rs 18,000. However, the staffers have been demanding a hike by 3.68 times which will increase the basic salary by Rs 8,000 to Rs 26,000.