The central government employees will soon hear some good news again following the latest DA boost. According to many media reports, the Centre plans to implement the 7th pay commission's recommendations and pay government employees' Dearness Allowance (DA) arrears that have been owed for 18 months.
Notably, government employees have long waited for the payment of DA arrears that span the period of 18 months from January 2020 to June 2021. According to reports, the cabinet would likely discuss and consider the problem soon.
The Centre hiked the dearness allowance for government employees by 11% starting in July 2021, and twice more since then. Currently, the overall DA for employees of the government is 38%.
According to media sources, the DA arrears owed to government employees would likely be paid in three installments. According to sources, Level-3 employees' DA arrears will be between Rs. 11,880 and Rs. 37,554, while Level-13 or Level-14 employees' arrears will be between Rs. 1,44,200 and Rs. 2,18,200.
Prior to Diwali, the Centre increased the DA for all Central government employees by 4%, from 34% to 38%, in accordance with the recommendations of the 7th Pay Commission. Employees of the central government will get a lump sum payment at an increase of 11% if the government decides to pay for the 18-month period.
Is There an Increase in Fitment Factor?
After the Union Budget for the next year, the government will decide to raise the fitment factor. If the government raises the fitment factor three times, the employee’s base pay, excluding benefits, will be 18,000 X 2.57, or Rs. 46,260. In addition, if the employees' requests are granted, the salary will be 26000 X 3.68, or Rs 95,680. The basic salary will be Rs. 21000 and the total salary, excluding allowances, will be Rs. 21000 X 3 = Rs. 63,000 if the government accepts three times the fitment factor.
The pay of central personnel is significantly influenced by the fitting factor. In addition, to pay allowances, the 7th Pay Commission recommended that the base salary and fitment factor of central employees be used to establish their salaries. This is the cause of the more than two-and-a-half-fold increase in central employees' salaries.
The 7th Pay Commission's fitment factor of 2.57 is multiplied by the Basic Wage, Dearness Allowance, Travel Allowance, and House Rent Allowance for calculating the salary.
Are EPF and Gratuity Included in the Salary?
Along with the allowances, the salary also includes extras like the Monthly Provident Fund and the Gratuity. The EPF and gratuity of a central employee are calculated using a different formula. Following the application of all allowances and CTC deductions, the take-home pay is calculated.
