7th Pay Commission: The Central government employees may get good news ahead of Holi as the there are many media reports about Dearness Allowance (DA) hike announcement.
7th Pay Commission: The Central government employees may get good news ahead of Holi as the there are many media reports about Dearness Allowance (DA) hike announcement. However, it would become icing on the cake for the central government servants (CGS) as their DA is expected to get restored by this July as the center froze DA and Dearness Relief (DR) benefit for pensioners till June 2021 — leading to deregulation of three DA installments for CGS. Once the DA gets restored, the monthly salary of the central government employees is expected to leapfrog as their existing DA of 17 per cent would suddenly become 28 per cent (17 + 3 + 4 + 4). This DA calculation is based on the expected 4 per cent DA for January to June 2021 and 4 per cent DA announced for July to December 2020 and 3 per cent DA announced for January to June 2020 period. However, there is a 7th CPC Fitment Factor of 2.57 that one needs to remember while calculating the probable rise in monthly salary.
Seventh Pay Commission: How fitment factor decides monthly salary of CGS
As per the 7th Pay Commission pay matrix rule, a central government employee’s monthly salary depends upon one’s basic pay. If a CGS has its monthly basic salary of Rs 21,000 then one’s monthly 7th CPC salary will be Rs 53,970 (Rs 21,000 x 2.57).
7th CPC DA
Apart from this, the central government servant is eligible for various 7th Pay commission perks like DA, HRA, Travel Allowance (TA), medical allowance, etc. Since existing DA of the central government employees’ is 17 per cent. Their existing DA is 17 per cent of their basic salary. In the case of Rs 21,000 monthly basic salary, the DA will be Rs 3,570. When the DA would become 28 per cent, the DA would become Rs 5,880.
7th Pay Commission TA
As a central government employee’s Travel Allowance is directly linked with its DA. One’s TA will automatically rise in sync with the DA from July 2021. So, DA restoration will lead to rise in DA and TA with the same percentage.
Rise in Provident Fund (PF) passbook balance
DA restoration will lead to rise in one’s PF passbook balance too. As per the 7th pay commission payment rules, a central government’s PF contribution is calculated on the basis of basic salary plus DA. So, after DA restoration, one’s PF contribution is expected to rise leading to rise in one’s PF passbook balance over the years. Since PF balance is one of the most common retirement fund accumulation tools for central government employees. This DA restoration is going to become a big sigh of relief for the central government employees.
