Central Govt Employees May Soon Have a Reason to Cheer With Salary and DA Hike Likely Next Year

New Delhi, 22-Oct-2020

Could there be a salary hike for central government employees in the near future? The Centre continues to woo the employees in the hope that it would eventually increase their consumption and add to green shooting of the economy. The Labour Ministry has changed the Consumer Price Index to decide the Dearness Allowance (DA) from the year 2001 to 2016. This means the current consumption pattern and inflation rates will be kept in mind while calculating the DA for employees. There was some concern that earlier the index was not in sync with reality and changed times. Add to this the fact that expenses have gone up in sectors such as healthcare, fuel expenses and some household expenses as well, which the new base index will now factor in. But there will be no immediate increase or change in DA of the central government employees. A four per cent increase in DA for central government employees was announced in March. Later in April, owing to the ongoing pandemic, the hike was deferred till June next year. The DA is still being paid at the earlier rate of 17% interest. Sources in the Labour Ministry say the DA will remain at this for now. This new price index is likely to have its impact only after mid next year and will bring cheer for over 45 lakh employees, including pensioners as well. An increase in DA is on but the changed price index will also mean that eventually a nominal salary hike could take place. Last week in an attempt to convince and cajole the central government employees to spend during the festival season, the finance ministry announced cash advance against LTA so that the employees open up their purse strings.