50 Lakh Govt Employees Will Get Salary Rise By Upto Rs 30,000, Increasing Consumption By Rs 1 Lakh Crore!

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The Union government’s entire budgetary impact of the DA/DR hike will be roughly Rs 30,000 crore in FY22. In the current fiscal year, states that traditionally follow the Union government’s DA/DR pattern are anticipated to spend another Rs 60,000 crore.

The Union government’s employees and pensioners will likely see their rise effective July 1 due to a large hike in dearness allowance (DA) and dearness relief (DR) (DR).

The Total Budgetary Impact Of The DA/DR Hike

The DA/DR allowance rate will rise to around 30% from the current rate of 17 per cent of basic pay/pension, which ranges from Rs 23,000 at entry-level to Rs 2,25,000 at the top level, as a result of the restoration of three frozen instalments and the July instalment.

The Union government’s entire budgetary impact of the DA/DR hike will be roughly Rs 30,000 crore in FY22. In the current fiscal year, states that traditionally follow the Union government’s DA/DR pattern are anticipated to spend another Rs 60,000 crore among themselves.

From When The Rates Of DA And DR Gets Effective?

The new rates, which take effect on July 1, will be paid before Dussehra (October 15), with two three months’ worth of arrears, putting a large sum in the hands of employees to spend.

“As soon as the government decides to release the next instalment of DA and DR, which is due July 1, 2021, the rates of DA and DR as of January 1, 2020, July 2020 and January 1, 2021, will be restored prospectively and will be subsumed in the cumulative revised rate effective from July 1, 2021,” the finance ministry had said in an office memorandum on April 23, 2020.

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