What The Rise In DA To Twenty-Eight Will Mean For Govt Employees
The 7th Pay Commission had classified all government employees into three categories – groups A, B, and C. the particular increase at a private level is going to be higher because the base for calculating the revised dearness allowance will include grade pay that each government employee gets.
The revision of the speed of dearness allowance announced on Wednesday will increase the pay of central government employees by a minimum of Rs 2,000 to Rs 25,000 per month, counting on their pay grade level. The Union government had increased the speed of dearness allowance from 17% of the essential pay to twenty-eight. the particular increase at a private level is going to be higher because the base for calculating the revised dearness allowance will include grade pay that each government employee gets.
The basic pay of officers recruited through public service commission ranges from Rs 56,100 to Rs 2.50 lakh a month, with the cupboard secretary getting a basic pay of Rs 2.50 lakh and other secretaries to the Union government getting Rs 2.25 lakh. Thus, officers will get a minimum additional allowance of Rs 6,100 per month while those at the secretary level will get a minimum additional allowance of Rs 24,750 per month.
The gains for various groups
Officers belong to A classification and account for almost 3% of all central government employees. The 7th Pay Commission had classified all government employees into three categories – groups A, B, and C.
The largest group of employees belong to group C, with basic pay starting from Rs 18,000 per month to Rs 29,200. This category of employees consists of clerks, stenographers, multi-tasking staff, attendants, storekeepers, and cashiers among others, and that they will get a minimum increase of Rs 1,980-3,212 in dearness allowance per month. Group C employees together account for quite 85% of the govt employees.
The basic pay of B employees, who include accountants, section officers, inspectors and sub-inspectors, and junior engineers, ranging from Rs 35,400 to Rs 53,100 per month then the rise in the allowance is going to be between Rs 3,894 and Rs 5,841 at the minimum.
The benefit for pensioners is going to be relatively small. Pensions are paid 50% of the essential pay of a serving counterpart then the extra relief for pensioners is going to be half the quantity that an individual in commission will get. Thus, a retired secretary will get around Rs 12,375 more per month as dearness relief.
What is the important impact?
The impact of the revision of the dearness allowance and relief on households of those employees is probably going to be mixed. Employees who are within the officer grade are likely to save lots of an outsized portion of the increment while employees within the lower grades could use a big portion of the raise on consumption expenditure, as long as inflation has been rising. Most pensioners too are likely to spend the extra money that they're going to get as dearness relief on consumption expenditure.
The additional expenditure of the revision of dearness allowance isn't clear, but the Union government had estimated that it'll spend Rs 2.59 lakh crore on pay, allowances, and travel expenses of an estimated 34.14 lakh central employees in 2021-22, Union budget documents show. The payout to about 14 lakh soldiers personnel would entail a further amount of over Rs 1.36 lakh crore.
The outgo on pension for all central government employees and soldiers is estimated at Rs 1.89 lakh crore. This includes Rs 1.16 lakh crore of pension to retired personnel of defense services.
Thus the entire outgo on salaries, allowances, and pension is probably going to be Rs 5.84 lakh crore within the current financial year, which might be about 17% share of the entire expenditure for the year and about 20% of the revenue expenditure.
The pandemic effect on revisions
The Union and state governments revise the DA payable to their employees and therefore the dearness relief payable to pensioners twice a year, effective July and January. These routine revisions had been frozen during the primary wave of the COVID-19 pandemic, thus the revisions due in January 2020, July 2020, and January 2021 weren't implemented.
As a result, the revised estimate of expenditure on compensation of central government employees for 2020-21 was 17.3% less than the estimates made within the Budget presented on February 1, 2020. The sharpest drop—43.7%—was within the allowances to be paid. Travel expenses were also 20.9% lower within the revised estimates for the year.
The revised estimates salary and allowance of the soldiers were also less than what was estimated within the allow 2020-21. Likewise, the outgo on pensions and other retirement benefits for 2020-21 was also lower at Rs 2.04 lakh crore within the revised estimates against the budget estimates of Rs 2.11 lakh crore.
States are expected to imitate within the coming weeks and months and announce a rise in dearness allowance/relief for his or her employees and pensioners. States’ proposed expenditure on salaries and pensions for the present year isn't readily available at one source but a Reserve Bank of India report on state budgets for 2020-21 estimated combined expenditure of all states on salaries at Rs 8.37 lakh crore compared to Rs 7.96 lakh crore within the revised estimates for 2019-20 and on pensions at Rs 3.86 lakh crore compared to Rs 3.55 lakh crore within the revised estimates for the previous year.
Read more Coronavirus News Highlights: Maharashtra Reports 8,010 New COVID-19 Cases, 170 Deaths
#7th Pay Commission #dearness allowance #COVID-19 pandemic #Union government #government employees
