7th Pay Commission: Centre hikes DA to 5% for govt employees, pensioners

Bhubaneswar/New Delhi: The Narendra Modi-led BJP government, on Tuesday, increased dearness allowance (DA) and dearness relief (DR) from 4 per cent to 5 per cent for 1.1 crore Central government employees.

The Centre has taken the decision in a meeting chaired by Prime Minister Narendra Modi in the national capital.

"Release of additional installment of DA is an increase of 1 per cent over the existing rate of 4 per cent of the basic pay/pension, to compensate for price rise," read an official statement.

The new rate will be applicable from July 1, benefiting 49.26 lakh central government employees and 61.17 lakh pensioners across the country.

The combined impact on the exchequer on account of both DA and DR would be Rs 3,068.26 crore per annum and Rs 2,045.50 crore in the financial year 2017-18 (for a period of 8 months from July 2017 to February 2018).

On the other hand, the Central government employees are also likely to get hike in basic pay as the National Anomaly Committee (NAC) is likely to meet soon to take a final decision on increasing the basic pay to Rs 21,000 from the recommended Rs 18,000 under the 7th Central Pay Commission (CPC).

Also Read: 7th Pay Commission: NAC Soon To Decide On Basic Pay For Central Govt Employees

The committee is presently looking into the pay anomalies arising out of the implementation of the 7th Pay Commission. It will meet soon and following a majority vote, the basic pay of the employees would be hiked. Besides, the government had earlier clarified that the basic minimum pay of Rs 18,000 is not fixed; it is variable, said sources.