According to the Finance Ministry, the dearness allowance (DA) payable to central government employees would be increased from 17 percent to 28 percent of basic pay commencing from July 1, 2021. However, the 28 percent DA hike decision does not affect railway employees and Armed Forces personnel. The Ministry of Railways and the Ministry of Defence will issue separate orders for them, according to the Finance Ministry.
According to the official memorandum issued by the Department of Expenditure (DoE) "The term '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." For Central Government Employees, the Department of Expenditure (DoE) has also clarified 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)." The DoE has also stated in its most recent statement that "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."
By keeping railway employees and Armed Forces personnel in mind, the DoE has further clarified that "These orders shall also apply to the 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."