7th Pay Commission: Govt Revises DA Rate For Central Govt Employees Due From July 2021

After granting Non-Productivity Linked Bonus (ad-hoc bonus) to Central Government Employees for the year 2020-21 on 18th October 2021, the Department of Expenditure (DoE) under the Ministry of Finance has yesterday declared a revision of the rate of Dearness Allowance (DA) to Central Government Employees (CGS) due from 01.07.2021. The Finance Ministry has raised the DA rate due to Central Government employees from 28% to 31% and the new rate will go into effect on July 1, 2021, according to the notification issued by DoE on 25th October 2021. The department has further added in a statement that "the President is pleased to decide that the Dearness Allowance payable to Central Government employees shall be enhanced from the existing rate of 28% to 31% of the Basic Pay with effect from 1st July 2021."

The basic pay for calculating DA at the revised rate shall comprise the pay drawn as per the Pay Matrix as specified by the 7th Pay Commission and would exclude any other form of pay such as special pay and so on. "The 'Basic Pay' in the revised pay structure means the pay drawn in the prescribed Level in the Pay Matrix as per 7th CPC recommendations accepted by the Government, but does not include any other type of pay like special pay, etc," DoE said in a statement.

The DoE also stated that the "Dearness Allowance will continue to be a distinct element of remuneration and will not be treated as pay within the ambit of FR 9(21)." According to the office memorandum (O.M) issued by the department, "the payment on account of Dearness Allowance involving fractions of 50 paise and above may be rounded to the next higher rupee and the fractions of less than 50 paise may be ignored."

The DoE has further claimed that "These orders shall also apply to civilian employees paid from the Defence Services Estimates and the expenditure will be chargeable to the relevant head of the Defence Services Estimates. In respect of Armed Forces personnel and Railway employees, separate orders will be issued by the Ministry of Defence and Ministry of Railways, respectively."

The DoE approved the Non-Productivity Linked Bonus (ad-hoc bonus) to Central Government Employees on October 18, 2021, with the calculation maximum for payment of ad-hoc Bonus under these directives being Rs. 7000 monthly emoluments. Ad-hoc Bonus payments will also be permitted under these regulations for eligible employees of the Central Paramilitary Forces and Armed Forces. According to the OM issued by the department on the said date, the benefit will be admissible subject to the following terms and conditions:-

(i) Only those employees who were in service as of 31.3.2021 and have rendered at least six months of continuous service during the year 2020-21 will be eligible for payment under these orders. Pro-rata payment will be admissible to the eligible employees for a period of continuous service during the year from six months to a full year, the eligibility period being taken in terms of number of months of service (rounded off to the nearest number of months);

(ii) The quantum of Non-PLB (ad-hoc bonus) will be worked out on the basis of average emoluments/calculation ceiling whichever is lower. To calculate Non-PLB (Ad-hoc bonus) for one day, the average emoluments in a year will be divided by 30.4 (average number of days in a month). This will, thereafter, be multiplied by the number of days of bonus granted. To illustrate, taking the calculation ceiling of monthly emoluments of Rs. 7000 (where actual average emoluments exceed Rs. 7000), Non-PLB (Ad-hoc Bonus) for thirty days would work out to Rs. 7000×30/30.4=Rs.6907.89 (rounded off to Rs.6908/-).

(iii) The casual labour who have worked in offices following a 6 days week for at least 240 days for each year for 3 years or more (206 days in each year for 3 years or more in the case of offices observing 5 day week), will be eligible for this Non-PLB (Ad-hoc Bonus) Payment. The amount of Non-PLB (ad-hoc bonus) payable will be (Rs.1200×30/30.4 i.e.Rs.1184.21 (rounded off to Rs.1184/-). In cases where the actual emoluments fall below Rs.1200/- p.m., the amount will be calculated on actual monthly emoluments.

Source: Department of Expenditure (DoE)