7th Pay Commission: Central government employees may soon get a good news regarding their salaries, as the Centre is likely to announce a hike in dearness allowance (DA) and fitment factor this month, according to media reports.

According to the reports, the minimum salary of the government employees is expected to see a rise from Rs 18,000 to Rs 26,000 for central government employees after the hike in fitment factor. The reports said that the government is expected to revise the fitment factor and dearness allowance (DA) in March after Holi (March 8).

The Fitment Factor

The common fitment factor currently stands at 2.57 per cent. It means that if somebody, let’s say, gets a basic pay of Rs 15,500 in 4200 Grade Pay, his total pay will be Rs 15,500×2.57 or Rs 39,835. The 6th CPC had recommended the fitment ratio at 1.86.

According to the reports, employees are now demanding the government to raise the fitment factor to 3.68. The hike will raise the minimum wage from Rs 18,000 currently to Rs 26,000.

The DA Hike

Dearness allowance (DA) and dearness relief (DR) are revised twice a year, effective January 1 and July 1. The last hike in September 2022, which benefitted about 48 lakh central government employees and 68 lakh pensioners, raised the DA by 4 per cent to 38 per cent. Before this, the government had raised the DA by 3 per cent to 34 per cent in March under the 7th Pay Commission.

Apart from the fitment factor, the government is also likely to revise DA soon, according to media reports.

18-Month DA Arrears

The government might also address the issue of 18-month DA arrears soon. The decision to freeze three instalments of DA/DR to central government employee/ pensioners due from January 1, 2020, July 1, 2020, and January 1, 2021, was taken in the context of COVID-19, which caused economic disruption so as to ease pressure on government finances.

In January, the finance ministry updated the house rent allowance (HRA) rules for central government employees under the 7th Pay Commission and said they will not be entitled to HRA in cases where:

(i) He/ she shares government accommodation allotted to another government servant; or

(ii) He/she resides in accommodation allotted to his/her parents/ son/ daughter by the central government, state government, an autonomous public undertaking or semi-government organisation such as a municipality, port trust, nationalised banks, Life Insurance Corporation of India, etc; or

(iii) His/ her spouse has been allotted accommodation at the same station by the central government/ state government/ autonomous public undertaking/ semi-government organisation such as municipality, port trust, etc., whether he/she resides in that accommodation or he/she resides separately in accommodation rented by him/her.

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