There could be a good news for the central government employees and pensioners, as the wait for hike in dearness allowance and dearness relief could end soon.
The government may approve the increase in DA and DR, while also approving the Terms of Reference (ToR) for the 8th Pay Commission, before Diwali, according to an NDTV India report.
The clearance of ToR will lead to the formal constitution of the 8th Pay Commission, which would then meet with several stakeholders before recommending the fitment factor and other allowances for salary revision.
Meanwhile, the DA and DR, aimed at offsetting the impact of inflation, may rise by 3%, the report said. This can take the key allowance from 55% to 58% of the basic pay. The increment will be made in accordance with the 7th Pay Commission.
Although the government hasn't made an official announcement, the expected increase is likely to benefit over 1.2 crore employees and pensioners.
Previously, a letter was reportedly sent to Finance Minister Nirmala Sitharaman by the Confederation of Central Government Employees and Workers (CCGEW), which said there was "discontent" among employees and pensioners due to the delay in the DA and DR hike announcement.
8th Pay Commission Setup Soon?
Pay commissions are formed once in a decade to revise the salaries and pensions. As per the precedent, the pay panels require around 18 months to submit their recommendations, which are then scrutinised by around three to nine months by the government before issuing the final nod.
The decision to form the 8th Pay Commission received the Union Cabinet's greenlight in January, but the panel is yet to be formally set up. Employee union leaders await the Centre's clearance for the terms of reference, which will serve as the broad framework for the commission.
In recent period, brokerages have indicated that the fitment factor to be recommended may range between 1.8 to 2.46. The fitment factor, notably, is the multiplication unit used for salary revision. It is multiplied directly with the basic wage.
However, the effective salary hike is lower as the dearness allowance is reset to zero once the fresh pay commission comes into effect.
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