7th Pay Commission basic salary: Dearness allowance hiked to 7 pct; no hike in fitment factor announced

7th Pay Commission basic salary: Union Cabinet led by Prime Minister Narendra Modi did not announce any hike of minimum salary based on fitment factor of 3.68 times or even lesser amount, but it did the next best thing. Government increased the dearness allowance (DA) to 7 per cent, from 5 per cent, effective from first January, 2018 for its 11 million employees and pensioners.

This is what the 7th Pay Commission linked news was all about. "The Union Cabinet chaired by Prime Minister Narendra Modi has given its approval to release an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners from January 1, 2018 representing an increase of 2 per cent over the existing rate of 5 per cent of the Basic Pay/Pension, to compensate for price rise," an official statement said.

According to the statement, the hike will benefit about 48.41 lakh central government employees and 61.17 lakh pensioners.

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It said that the combined impact on the exchequer on account of both DA and DR would be Rs 6,077.72 crore per annum, and Rs 7,090.68 crore in 2018-19 (for a period of 14 months from January, 2018 to February, 2019).

The official statement by the government said that this increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Pay Commission.