7th Pay Commission Salary Hike News: Central Government Employees to Get Second DA Hike, How Much Salary Increase?

7th Pay Commission Salary Hike News: Central government employees awaiting the dearness allowance (DA) hike for July-September are set to receive positive news soon. The Narendra Modi government is expected to announce the next DA increase in the first week of September, according to reports.

Dearness Allowance (DA Hike) to be implemented from July 2024 has been confirmed by the government. AICPI index figures for June 2024 have been released. There has been a huge increase in this. Central employees and pensioners drawing salary under the 7th Pay Commission will get its direct benefit. The Dearness Allowance for central government employees was increased to 50%, effective January 1, 2024. With the DA reaching 50%, several allowances including the House Rent Allowance (HRA), have been increased in the last few months.

7th Pay Commission DA Hike News

The Centre is expected to announce the second increase in the Dearness Allowance (DA) and Dearness Relief (DR) for employees and pensioners at the beginning of September. It is projected that the Narendra Modi-led government may approve a 3% rise in DA and DR in this round. DA or Dearness Allowance is allotted to active government personnel, while pensioners obtain DR or Dearness Relief.

The salary revision will apply to non-teaching staff of universities, employees of aided educational institutions, and local bodies. The necessary budgetary provisions have been made to accommodate this additional expenditure, as stated by the chief minister.

7th Pay Commission Salary Hike 2024

A senior finance ministry official clarified to the Financial Express that it was the 5th Pay Commission which suggested merging dearness allowance into the basic, every time the consumer price index rises by 50% over the base index used by the last pay commission. Accordingly, in February 2004, the DA at 50% was merged into the basic and a precedent was set. However, in the 6th Pay Commission recommended not to merge DA with basic pay even when the dearness allowance breaches the 50% of basic salary mark.

Benefits

• The raise in salary and pension will provide government workers with greater financial stability and security.
• The increase in basic pay and housing allowance will allow employees to cover their living expenses more comfortably, leading to an improved overall quality of life.
• A significant salary increase can uplift the morale and motivation of government workers, resulting in increased productivity and job satisfaction.
• Competitive salaries and benefits will make government positions more appealing, helping to retain current employees and attract new talent to the public sector.
• The rise in disposable income for many employees can lead to higher consumer spending, which in turn can stimulate the local economy.

Drawbacks

• The increase will lead to an extra yearly cost of Rs 20,208 crore, placing a significant financial burden on the state’s budget.
• To cover the added expenses, the government might have to shift funds from other projects or services, potentially impacting them negatively.
• Salary hikes for a large portion of the population could drive up demand for goods and services, potentially causing inflation.
• Like past instances, there could be delays and logistical hurdles in distributing the revised salaries and arrears.
• The increase in pensions will contribute to the state’s long-term liabilities, potentially affecting the pension fund’s financial health and future payouts.

Aftermath of salary hike

• The government faced a significant financial burden upon the implementation of the Seventh Pay Commission.
• Similar to the Sixth Pay Commission in 2006, there were delays in announcing the new pay scale.
• The pay scale officially began on January 1, 2006, but the announcement was made on March 24, 2009.
• Central government employees had to receive their Dearness Allowance (DA) arrears for a period of 39 to 42 months.
• The arrears were paid in three installments over the financial years 2008-09, 2009-10, and 2010-11.
• The Seventh Pay Commission introduced a new pay scale, replacing the previous one.
• Under the new pay scale, the total salary was set at Rs 23,226 after a 16 percent DA increase on January 1, 2009.
• The recommendations of the Fourth, Fifth and Sixth Pay Commissions were implemented in 1986, 1996, and 2006 respectively.
• The recommendations of the Seventh Pay Commission began in January 2016, adding further financial responsibilities for the government.

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