NEW DELHI: As per the Modi-led government's decision, the center is going to restore Dearness Allowance (DA) benefit to its central government employees effective from 1st July 2021.
With this, the central government servants are now seeking on how it will change their 7th pay commission matrix because a central government employee's DA is expected to jump from the existing 17 percent to 28 percent which includes a 3 percent DA hike effective from 1st January 2020, 4 per cent DA hike effective from 1st July 2020 and expected 4 per cent DA hike due from 1st January 2021. Read more
So how this will work?
A central government employee's salary is divided into three parts — basic salary, allowances, and deductibles.
Further. the net CTC is a central government employee is the summation of basic salary multiplied by the 7th CPC fitment factor plus all allowances. However, net salary is the difference between Net CTC and deductibles like PF contribution, Gratuity, etc.
Since the 7th pay commission fitment factor is 2.57. A central government employee's CTC other than allowance is a multiple of basic salary with 2.57. Suppose, a central government employee's basic monthly salary is ₹20,000. In that case, that central government employee's monthly CTC other than allowance will be ₹51,400 ( ₹20,000 x 2.57). Read more
Now comes other parts of CTC means allowance-
This allowance includes Dearness Allowance (DA), Travel Allowance (TA), House Rent Allowance (TA), medical reimbursement, etc. Since DA may rise from 17 per cent to 28 per cent from 1st July 2021, a central government will be eligible for 28 per cent DA, which is calculated on the basis of one's basic salary.
Similarly, one's Travel Allowance (TA) will rise in sync with the DA-
One's TA will also rise. So, after the rise in DA, a central government employee's allowance is also going to increase. So, this expected rise in DA of a central government employee is going to result in a big leap in one's monthly salary. Apart from that, three installments of DA arrears is going to be an additional benefit.
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