A hike in Dearness Allowance announced by the Ministry of Labour & Employment on Friday benefits more than 1.50 crore central government employees. In what comes as good news for millions, the Labour Ministry has marginally increased Dearness Allowance for Central Government employees, the minimum wage of industrial workers employed in the central sphere including in mining and construction activities from Rs 105 to Rs 210 per month by revising the Variable Dearness Allowance.
The revised Dearness Allowance shall come into effect from April 1, 2021.
This will be a major relief to a different category of workers engaged in the central sphere at a time when the country is struggling with the second wave of the COVID-19 pandemic. It will be for scheduled employment in the central sphere and applicable to the establishments under the authority of the Central Government, Railway administration, mines, oil fields, major ports or any corporation operated by the Central Government. These rates are equally applicable to contractual cum casual employees or workers.
"The Dearness Allowance hike ranges from Rs 105 to Rs 210 per month for workers in the central sphere,” Chief Labour Commissioner Central (CLC) DPS Negi told PTI.
Labour and Employment Minister Santosh Gangwar crowed the step would benefit about 1.50 crore workers engaged in various scheduled employments in the central sphere across the country.
“This hike in VDA will support these workers particularly in the current pandemic times”, he said.
What is Variable Dearness Allowance?
If you are a government employee in India, you know being one has its own benefit, one of them is Dearness Allowance. Under the ‘cost of living' category in one's payslip, the amount that the employee gets from the government is called Dearness Allowance. It is an allowance that every government employee receives and is calculated in proportion to the basic salary.
Hikes in the Variable Dearness Allowance are usually announced every six months with effect from January 1 for the January-June period and from July 1 for the June-December period in accordance with the Consumer Price Index. Dearness allowance is a cost of living adjustment paid to government employees, public sector employees and pensioners and is calculated as a percentage of basic salary to justify the impact of inflation.
The cost of living is ever rising no matter where one lives. This is the primary reason people expect regular pay hikes too. In the middle of a Pay Commission cycle, the Centre compensates and justifies to its employees for the rise in the cost of living by raising the Dearness Allowance for central government employees.
It is to be noted, every time a new salary structure is coined by a pay commission, the pension for retired employees of the public sector is also revised. In the case of Dearness Allowance; every time Dearness Allowance is raised by a certain percentage, the same reflects in the pensions of retired public sector employees. This applies to both regular pensions as well as a family pension.
For pensioners, every time the Dearness Allowance is updated, it results in an increase in their monthly pension. For serving government employees, and those of government-owned companies, an increase in DA can lead to a substantial increase in their monthly pay-in-hand.
Over 50 lakh employees and 65 lakh (over one crore) pensioners are eligible to benefit from the latest increase in Dearness Allowance by the Centre. On the whole, an increase in Dearness Allowance for central government employees definitely grants more money in the hands of both present and former employees (pensioners).
A rise in Dearness Allowance directly improves one's take-home salary if one is a central government employee. However, if a person is with the private sector and a taxpayer to boot, s/he may not be as happy. Their taxes contribute to the government’s salary and pension bill for its current and former employees, Dearness Allowance included.
A detailed breakup on the Dearness Allowance update was established by MoS Ministry of Labour and Employment Santosh Gangwar on his official Twitter handle. It can be perused below,
Rate of VDA has been revised for Central sphere workers.— Santosh Gangwar (@santoshgangwar) May 21, 2021
This will benefit about 1.50 crore workers engaged in various scheduled employments in central sphere across the country.https://t.co/dyBGEHRuUZ