Central Government Restores DA, Effective From July 1; Increases From 17% to 28%

by Shatakshi Gupta

The NDA government has given a big relief to the central employees amid rising inflation and the corona pandemic. The government has increased the dearness allowance i.e. DA of central employees from 17% to 28%. Its benefit will be available retrospectively from July 1 2021. The Cabinet Committee of Economic Affairs (CCEA) approved this decision on Wednesday.

The decision will benefit lakhs of employees:

This decision of the government will benefit more than 50 lakh central employees and 61 lakh pensioners. For this, the government will spend about Rs 34,401 crore.

 Earlier, due to the Corona pandemic, the government had banned the increment in DA of employees and pensioners till June 2021. In such a situation, they will get benefit from the latest decision. Central government employees and pensioners are yet to get 3 installments of DA. These installments were to be paid on 1 January 2020, 1 July 2020 and 1 January 2021.

Also read: Revamped Cabinet Of Modi Govt. : Here Is The Complete List Of New Cabinet Ministers

What is Dearness Allowance (DA)?

Dearness allowance is a part of the salary. It is a fixed percentage of the basic salary of the employee.  The purpose of this allowance is tocounter the effect of inflation in the country. So, as the inflation rises, it is also extended from time to time. However, it is not directly pegged with inflation. Retired employees also get the benefit of this.

What changes will appear in salary?

To calculate the DA amount put your salary in the below formula:

(Basic Pay + Grade Pay) × DA % = DA Amount

In other words, after adding the grade pay to the basic salary, the rate of dearness allowance is multiplied in that sum. The result that comes is called Dearness Allowance (DA).For instance, your basic salary is 20 thousand rupees and grade pay is 2800 rupees. On adding both the total became 22800 rupees. Now multiply this with DA per cent, which now has been increased to 28%. In this way, your DA is 6384 rupees. Earlier, in terms of 17% DA, you were getting Rs 3876 as DA.

WPI inflation in June was 12.07%

The government on Wednesday released the wholesale inflation data for June. Accordingly, the Wholesale Price Index (WPI) declined to 12.07% in June, after reaching to a record 12.94% for the fifth consecutive month in May. When compared to the wholesale inflation rate in June 2020, it was 1.81%.

The biggest reason for the wholesale inflation rate exceeding 12% in June is the cost of mineral oil. Apart from this, the prices of manufactured products such as basic metals and food products have also increased.

Retail inflation remained above the target

The retail inflation rate in the country has been recorded above 6 per cent for the second consecutive month. According to data released by the government, retail inflation stood at 6.26 per cent in June this year, which is just four basis points lower than May’s level of 6.3 per cent.  According to data from the National Statistics Office, inflation in the food basket was recorded at 5.15 per cent in June, up from 5.01 per cent in May.