Good news for Central government employees! Prime Minister Narendra Modi-led Central government is all set to increase the Dearness Allowance (DA) of employees yet again. Earlier in August, the Centre had increased DA under the 7th Pay Commission for lakhs of its employees and pensioners. The DA was increased from 17% to 28%, with effect from July 2021. Now, according to the latest reports, the DA is likely to increase again and this time T0 28 percent
According to reports, more than 50 lakh permanent Central government employees and 65 lakh pensioners will benefit from this. For those who are unaware, DA was increased by 4% in January 2020, then by 3% in June 2020, and by 4% in January 2021. HRA has been increased by 1-3 per cent for different categories. The Centre had earlier said that the HRA will be granted to Central government employees according to the categories of the cities such as X, Y and Z. After revision, the HRA for X category cities will be 27% of basic pay, similarly, HRA for Y category cities will be 18% of basic pay and for Z category cities, it will be 9% of basic pay.
As per the guidelines, if the population of a city crosses 5 lakhs then it gets upgraded from Z category to Y category. That is, instead of 9%, 18% HRA will be granted to employees there. The cities whose population is more than 50 lakhs, that falls in the X category. The minimum house rent allowance for all the three categories will be Rs 5400, Rs 3600 and Rs 1800. According to the Department of Expenditure, when the dearness allowance reaches 50%, the HRA will be reduced to 30%, 20% and 10% for X, Y and Z cities.