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new pension scheme, 60% of the accumulated corpus from contributions during a person’s working years is allowed to be withdrawn at the time of retirement.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...

The All-India CPI-IW for February 2022 decreased by 0.1 points to 125 points from 125.1 points in January this year. Retail inflation for industrial workers eased to 5.04 per cent in February from 5.84 per cent in January this year mainly due to lower prices of certain food items. Inflation based on the consumer price index for industrial workers (CPI-IW) was at 4.48 per cent in February 2021, a labour ministry statement said. Food inflation stood at 5.09 per cent in February 2022 against 6.22 per cent in the previous month and 4.64 per cent during the corresponding month a year ago. Based on the All-India CPI-IW numbers, it is expected that the AAll-India CPI-IW Dearness Allowance or the DA for central government employees from July 2022 will be 37%.

Prime Minister Narendra Modi's Union Cabinet approved a 3% increase in Dearness Allowance (DA) for central government employees and Dearness Relief (DR) for pensioners on Wednesday. The DA and DR are presently at 34 percent, with the latest increase taking effect in January 2022. Dearness Allowance is a component of central government employees' pay that is designed to protect them from the effects of inflation. Dearness The term "relief" refers to the assistance provided to retirees. According to the government, "this rise is in conformity with the established formula, which is based on the recommendations of the 7th Central Pay Commission." In the face of rising petrol and oil prices, as well as inflation, the move is expected to help around 47.68 lakh central government employees and 68.62 lakh retirees. The total impact of Dearness Allowance and Dearness Relief on the exchequer would be Rs 9,544.50 crore per year. Every year, between January and July, th...

DA Hike Update for Central Government Employees: The Union government led by Prime Minister Narendra Modi may give some good news to central government employees in the coming days, as the Union Budget 2022 has been presented. According to reports in the media, the government may consider giving out arrears to the employees. Amid the Covid-19 pandemic, arrears for central government employees has been frozen for almost two years now, with the pandemic creating an economic constraint in the country. However, as India is reviving from that, some good news is expected from the government in this regard, reports have suggested. As per a report on Zee News, the Union cabinet is mulling on the decision to give Rs 2 lakh to the employees in one go as DA arrear. However, there is no official statement regarding this, and the government too has not commented anything on it. Dearness allowance, or DA, is generally increased twice a year, in January and July. However, there was no hike announced ...