7th Pay Commission: The Centre is expected to merge the dearness allowance of government employees and dearness relief of pensioners into the basic pay from July when it will hike the DA in July 2024.
7th Pay Commission News: Here’s a big update for the Central government employees waiting for their salary hike. After the upcoming DA hike in July, their basic pay is also likely to increase by Rs 9,000 from the same month, a report by The Financial Express said.
The report added that the Centre is expected to merge the dearness allowance of government employees and dearness relief of pensioners into the basic pay from July when it will hike the DA for them.
What Is Dearness Allowance?
For general information, the Central and state government employees receive dearness allowance two times a year to compensate for the price rise and inflation. When DA will be hiked this time in July, over 50 lakh central government employees and 67 lakh pensioners will be benefited from the move of the Central government.
When Last DA Hike Announced?
The Central government had in March this year hiked the DA for government employees by 4% to 50%. This led to the speculations that the allowance would now be merged into the basic pay. The development came as the Centre during the 5th Pay Commission in 2004 had merged DA into the basic salary after the allowance hit the 50% ceiling. However, no such steps were recommended by the 6th Pay Commission.
Experts closely following the developments are of opinion that the Centre might consider merging DA into the basic pay this time as other allowances like house rent allowance, children’s education allowance, special allowance for childcare, hostel subsidy and gratuity ceiling were revised automatically after DA was hiked to 50%.
Announcement Expected After Lok Sabha Polls?
These experts further speculate that DA-basic pay merger will be announced once the new government is formed at the Centre after the Lok Sabha Elections. The next hike in DA will be announced in July and after the DA is merged into the basic pay, this allowance will again start from ‘Zero’.
Gratuity Limit Increased For Govt Employees
In the meantime, the Centre has announced another gift to its employees – after increasing the Dearness Allowance (DA) by 4 per cent, the Centre has decided to increase the gratuity limit for the government employees. Along with this, the retirement and death gratuity limit has also been increased by 25 per cent. This decision from the Centre raises the limit from Rs 20 lakh to Rs 25 lakh.
What is Gratuity Limit?
For the general information, the gratuity is a reward granted by a company to an employee who has worked for a long time. It is being given to the employees in addition to salary, pension and Provident Fund (PF). An employee will be eligible to gratuity only if they have worked for at least five years in the company.