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Friday, 16 April 2021

How will the reinstatement of DA change the pay matrix for central employees? Understand

How will the reinstatement of DA change the pay matrix for central employees? Understand

The Center recently announced that it would reintroduce dearness allowance for government employees. The Modi government has said that this system should be started from 1 July 2021. However, the employees are not able to understand at present what will be the change in their salary under the Seventh Pay Commission.

Please tell that in January last year, the Dearness Allowance (Dearness Allowance) was discontinued. By restarting it, the DA of the Central Government employee can increase to 28 per cent from the previous 17 per cent. In fact, after the system is restored, all the three installments of (dearness allowance) will be added to the salary of CGS.

This means that the three percent DA hike, which came into force on 1 January 2020, is included. Apart from this, 4 percent hike in July 2020 and 4 percent hike on January 1, 2021 will also be added to DA. This means a total increase of 11 per cent over the previous DA.


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Due to this increase in DA, there will be an increase in the salary of the employees. This will benefit about 65 lakh retired pensioners and 52 lakh central government employees. Apart from this, the amount going to the provident fund of the employees will also increase. PF calculation is always done by adding salary and dearness allowance. Therefore, the increase in dearness allowance will also increase the PF balance.

How much will be the benefit after the seventh pay commission: But according to the rules of the seventh pay commission, the salary of any employee will be three parts. One is his basic salary, the other - the allowances he receives and the third is the amount of deductions or deductibles. Net CTC of central employees will be the fitment factor of his basic salary and the addition of all allowances. However, the salary in hand will be less than his net CTC, as the amount of PF will be deducted in it.

The fitment factor of the Seventh Pay Commission has been kept at 2.57. In such a situation, the CTC of any Central Government employee under the Seventh Pay Commission will be 2.57 times the basic salary he gets and the additions of allowances. That is, if the basic salary of an employee will be Rs 20 thousand, then the CTC (20,000 * 2.57), excluding the allowances, will be Rs 51 thousand 400.

Now many types of allowances will also be added to it. That is, in addition to Dearness Allowance (dearness allowance), travel allowance (travel allowance), house rent allowance, medical allowance, etc. are also added. Now the DA is expected to increase drastically after the DA reaches 17 to 28 per cent.

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