Central Government Employees & Employment Corner

With demand growing for the old pension system (OPS) with assured benefits, the Centre and some state governments are exploring ways to salvage pension reforms, by treading a middle path between the fiscally-expensive OPS and the reform-oriented National Pension System (NPS). One option being considered is to offer a guaranteed pension to government staff at around 50% of the last pay drawn under the NPS by tweaking the existing scheme without burdening the exchequer too much. While OPS is based on the concept of defined benefits, the principle that underlies NPS is defined contribution. Currently, under the NPS, also called the new pension scheme, 60% of the accumulated corpus from contributions during a person’s working years is allowed to be withdrawn at the time of retirement. Such withdrawal is also tax-free. The balance of 40% is invested in annuities, which according to an estimate, could provide a pension equivalent of about 35% of the last pay drawn. However, it is not a guara...

According to media reports, central government employees' base salaries would likely increase following Holi since the government may finally make a decision regarding the pending fitment factor raise. After Holi 2023, central government employees should anticipate some significant news. The fitment factor, dearness allowance (DA) hike, and compensation adjustments may be decided upon by the 7th pay commission. In accordance with the 7th pay commission's recommendations, the central government has amended the home allowance (HRA) rule for central personnel. Recent Developments in Salary Revision: There have been rumours that the government may introduce a new wage adjustment methodology given that the 8th pay commission won't be established for another year. This is anticipated to occur after Holi 2023. Updates Regarding Salary Revision: According to reports, the government might announce a new formula for salary revision, seeing that only one year is left before the format...

Central government employees are likely to get a hike in their salary even as the Centre is expected to revise upwards the fitment factor after Holi, March 8, according to media reports. The minimum salary is expected to see a rise from Rs 18,000 to Rs 26,000 for central government employees. The common fitment factor currently stands at 2.57 per cent. It means that if somebody, let’s say, gets a basic pay of Rs 15,500 in 4200 Grade Pay, his total pay will be Rs 15,500×2.57 or Rs 39,835. The 6th CPC had recommended the fitment ratio at 1.86. According to the reports, employees are now demanding the government to raise the fitment factor to 3.68. The hike will raise the minimum wage from Rs 18,000 currently to Rs 26,000. Earlier, media reports have also suggested that central government employees under the 7th Pay Commission are also likely to get a hike in their dearness allowance (DA) in March 2023, effective January 1, 2023. The government might also raise dearness relief (DR) for pe...

According to a press statement from the Labour Bureau, the All-India CPI-IW for December 2022 dropped by 0.2 points to 132.3 (one thirty two point three) points. With this release, DA/DR for January 2023 has now been confirmed with a 4% increase. It will be at 42% in the 7th CPC DA/DR.  Dearness Allowance (DA) for central government employees in India is revised every six months, based on changes in the Consumer Price Index (CPI) for Industrial Workers. The Consumer Price Index (CPI) for Industrial Workers is a measure of inflation for urban industrial workers in India. It reflects the changes in the prices of a basket of goods and services consumed by this specific population, and is used as a benchmark to adjust various financial benefits, such as Dearness Allowance, pensions, and wages. The calculation of the CPI-IW takes into account the spending patterns of industrial workers, including their consumption of food, housing, fuel, light, clothing, and medical care, among other it...