There is good news for central employees. This news is related to travel allowances, so it is important. This year lakhs of employees of the country are waiting for dearness allowance (DA). If everything goes well, it will be announced soon. The latest news in this regard is that the Labour Office has released the data of AICPI (All India Consumer Price Index) from July 2020 to December 2020. This is expected to increase the DA of the central employee by 4 percent.
DA is currently 17 percent of the workforce, which has increased to 21 percent in 2019. But the government stopped the increase until June 2021 due to the Corona infection. The central government revises the dearness allowance from time to time.
Its calculation is in percentage, considering the base pay as base. At present, DA is different for employees and pensioners. Dearness allowance is fully taxable. At the same time, house rent allowance is also very important for the employee. The calculation of DA is based on the percentage of basic salary. Dearness allowance is given to central government employees to help them bear their expenses keeping inflation in mind.
It is announced twice a year, the first installment from January to June and the second from July to December, which is combined with HRA. However, dearness allowance is not available at present due to Covid-19.
Government employees are expected to get dearness allowance this year. Inflation allowance is expected to increase by four percent in January 2021. This will benefit about 1.5 crore, central employees and pensioners, across the country. Currently, seven percent dearness allowance is payable from July 2020, but it is not being paid yet. An index is released by the Union Labour Ministry on the average of inflation every month.
Based on the same, dearness allowance is fixed for central employees and pensioners in the months of January and July. This allowance has been fixed on the basis of consumer price index for industrial workers of the last 12 months. Based on this, it is calculated on the average of the previous 12 months.
Apart from DA, the DA restoration will lead to a rise in central government employees’ Travel Allowance (TA) hike too. According to the seventh pay commission rules, all central government employees’ TA will rise in sync with the DA rise. So, if the Centre announces 4 per cent DA for the central government employees, then not just DA but the TA will also rise in the same volume for the central government employees.
It is to be noted that the dearness allowance of the central government employees is 17 per cent of their basic salary. Once the DA gets restored then their DA will go up from 17 per cent to at least 25 per cent (17 + 4 + 4).