7th Pay Commission: 'Salary change' from April 1, pending DA instalments restoration from July—How central government employees' salary slip will change

The government is planning to introduce New Wage Code Bill 2021, which has the the provision to have the basic salary of the employees at 50 per cent of one’s net monthly Cost to Company (CTC). This means that the changes would affect the basic pay structure of an employee. Apparently, it will also affect PF, Gratuity, Dearness Allowance, Travel Allowance and House Rent Allowance of the central government employees.  

There is total overhaul in salarly structure is on the cards if the Central government implements the New Wage Code Bill 2021 or new labour law from April 1, 2021 

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The salary, provident fund and gratuity of the Central government employees will be impacted if the Central government is implementing the New Wage Code Bill 2021 or new labour law from April 1, 2021. If reports are to be believed tis new law will inrease the contribution to provident fund, while in-hand salary will come down.   

Recently, the government has also decided to restore three pending installments of Dearness Allowance (DA) and Dearness Relief (DR) of central government employees and retired pensioners from July.  

This was confirmed by the Minister of State (MoS) for Finance Anurag Thakur. Thakur in a written reply to the Rajya Sabha on March 9 made the revelations.   

"Three pending installment of Dearness Allowances of central government employees and Dearness Relief for pensioners to be restored prospectively. The rates will be subsumed in the cumulative revised rates of DA," the minister had said in the written reply. 

Earlier in the view of Covid 19 pandemic, the government has chosen to freeze the additional installments of DA for central government employees and DR for pensioners - due on January 1, 2020, July 1, 2020 and January 1, 2021. 

Thakur said that the decision to stop additional DA and DR allowed the government to save more than Rs 37,000 crore during this period.