From July 2021, the government has agreed to restore the pending DA. Central Government Employees will soon get full DA benefits, according to the Narendra Modi government. Anurag Thakur, Minister of State for Finance, stated this in a written reply to the Rajya Sabha. From July 1, 2021, central government employees will get full DA benefits, according to the Minister for states for Finance (MoS). As a result, central government employees have been looking forward to receiving the Dearness Allowance (DA), which has been pending since January 2021. The government had halted three installments of DA and for central government employees and DR (Dearness Relief) for pensioners due on January 1, 2020, July 1, 2020, and January 1, 2021 due to the COVID-19 pandemic. The decision allowed the government to save Rs 37,430.08 crore and let them cope with the catastrophe.
Anurag Thakur stated in a letter addressed in the Upper House of Parliament that three pending DA installments for Central Government Servants will be restored and that the updated DA rates will take effect on July 1, 2021. The central government's DA benefit has been frozen until June 2021, and Anurag Thakus' declaration has emerged as a huge relief to the roughly 52 lakh central government employees. The DA will climb by at least 4% from January to June 2021, according to the latest data from All India Consumer Price Index (AICPI). The restoration of DA benefits on July 1 will have a direct impact on Central Government employees' salary. The DA rise will have a significant impact on central government employees' DA, HRA, Travel Allowance, and Medical Allowance.
In the Upper House, Anurag Thakur said that "As and when the decision to release the future installments of Dearness Allowance due from 01.07.2021 is taken, the rates of DA as effective from 01.01.2020, 01.07.2020 and 01.01. 2021 will be restored prospectively and will be subsumed in the cumulative revised rates effective from 01.07.2021."
According to Anurag Thakur, effective DA for central government employees may rise from 17 percent to 28 percent starting July 1, 2021. This 11% increase in the DA includes a 3% rise reported for January to June 2020, a 4% jump reported for July to December 2020, and an estimated 4% jump for January to June 2021. As a result, the DA increase from 17% to 28% will result in a significant increase in one's 7th CPC salary.
The restoration of the DA will also bring relief to about 60 lakh retired central government pensioners. While declaring the DA freeze, the centre also announced a freeze on the DR (Dearness Relief) benefit for retirees. As a result, if the DA is reinstated, the DR benefit for retirees will be restored as well, and retired central government employees' pension is also expected to take effect from July 1, 2021. Since the Dearness Relief (DR) is directly related to the DA hike, a pensioner's DR is automatically increased when the DA hike is declared. The increase in DA from 17% to 28% will not only result in a raise in the monthly salary of central government employees. It would also result in an increase in their monthly PF contribution.