7th Pay Commission: Recently, the Central Government announced a major increase in the dearness allowance (DA) for its employees, increasing it by 4% to 50% of base salary. Significant revisions have been made as a result of this move, which will take effect on January 1, 2024, especially with regard to government employees’ retirement gratuity benefits. The retirement gratuity and death gratuity maximum limits have been raised from Rs 20 lakh to Rs 25 lakh, a 25 percent increase.
Gratuity Increase Under the 7th Pay Commission
The maximum limit of Retirement Gratuity and Death Gratuity under the Central Civil Services (Pension) Rules, 2021 or the Central Civil Services (Payment of Gratuity under National Pension System) Rules, 2021, will be increased by 25% based on the recommendations of the Seventh Central Pay Commission (7th CPC), according to the Office Memorandum (OM) dated May 30, 2024. As a result, the prior maximum ceiling of Rs 20 lakh was raised to Rs 25 lakh as of January 1, 2024.
Temporary Halt of the Initial Announcement
The date of the first announcement of this hike was April 30, 2024. As evidenced by the following statement, it was put on hold temporarily on May 7, 2024: “The circular number HRD-1/8/2024/Misc-Circulars-Part(1)/1004 dated 30.4.2024 is kept in abeyance with immediate effect.”
DA and DR Increase in March 2024
By increasing the Dearness Relief (DR) and Dearness Allowance (DA) by 4% in March 2024, the central government gave millions of workers and retirees substantial relief. The advantage of this 50% DA rise extends to current employees; retirees will see changes to their salary and allowances, including gratuity.
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