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7th Pay Commission: Good news for govt employees in Odisha, state hikes DA by 5%; other states may follow

India TV News 2020-02-14 13:04:40

: In a welcome news for the Odisha government employees, the Naveen Patnaik administration has hiked the Dearness Allowance (DA) by 5 per cent of the state government employees and said that it will approve 10% arrears pending as part of 7th Pay Commission's implementation in the state.

The 10% arrears dues will be cleared with effect from January 1, 2016 to August 31, 2017 as per Odisha Revised Scales of Pay Rules, 2017 during 2019-20 financial year.

In a press statement, the Chief Minister's Office (CMO) said, "The work-charged employees shall get the above 10% arrear salary in the same manner as applicable to regular government employees in terms of paragraph-1 of Finance Department Resolution No. 26347/F on September 7, 2017."

In addition to this, the Odisha government has also announced a 5 per cent Dearness Allowance (DA) for the government employees with effect from January 1, 2020. 

As the Odisha government has announced a 5 per cent DA hike for the government employees, the said move will directly benefit 3.5 state employees.

Earlier in January, the Uttar Pradesh Government has announced Dearness Allowance (DA) for all its employees at various Public Sector Undertakings (PSUs) and Corporations. After this decision, the annual salary of the Level-1 employees of UP Public Sector Undertakings (PSUs) and Corporations will go up by nearly Rs 26,000. Till now, the state government was not providing DA benefits to its Public Sector Undertakings (PSUs) and Corporation Employees.

Dearness Allowance (DA) is basically a component of salary paid to government employees. DA is a cost of living adjustment allowance paid to government employees and pensioners linked to the Consumer Price Index to offset the impact of inflation. DA is fully taxable.

In January 2019, the Central Government had increased the DA by three per cent.

DA is decided on the basis of the city. It varies depending on the employee's office location. DA will be more for the employees in the urban area. While for semi-urban areas and villages DA will be less.

Just like DA, House Rent Allowance (HRA) is also an important component of the employee's salary given by employer to help fulfill the housing needs of its employees.

However, HRA is provided to both - public sector and private sectors employees. Calculation of DA is based on the specific percentage of basic salary, which is then added to HRA in Basic.

DA is linked to the All India Consumer Price Index (AICPI). For DA calculation, AICPI average is taken in the formula.

Percentage of DA = {(Average of All-India Consumer Price Index for the past 12 months (Base year 2001=100) -115.76)/115.76}x 100.

Seventh Pay Commission is an administrative system that is set up by the Government of India to determine the salaries of government employees. It benefits per 1 crore central government employees, including around 53 lakh pensioners.