Gujarat Govt Hikes DA By 4%, Raises NPS Contribution, To Calculate LTC Cash On 7th Pay Commission

7th Pay Commission, 4% DA Hike In Gujarat: In a bonanza for state government employees and pensioners, the Gujarat government has announced a 4 per cent hike in dearness allowance (DA) and dearness relief (DR). The state government also decided to raise its NPS contribution by 4 per cent and to calculate LTC cash conversion on the basis of the 7th Pay Commission from now onwards.

DA is given to government employees, while DR is given to pensioners.

With the latest DA hike, the dearness allowance of state government employees will now increase to 46 per cent as compared with 42 per cent earlier, according to an official statement.

The DA has been hiked with effect from July 1, 2023, and employees will be given arrears for the past eight months, it said. Around 4.45 lakh state government employees and 4.63 lakh pensioners will benefit from the decision to hike DA, the official release said.

The difference in dearness allowance for the 8 months spanning from July 1, 2023, to February 2024, will be distributed in three instalments along with salaries, it said.

“The difference amount for the period between July 2023 and September 2023 will be paid with the March 2024 salary, while arrears for October to December 2023 will be disbursed with the April 2024 salary. Additionally, dearness allowance arrears for January and February 2024 will be included in the May 2024 salary for the employees,” it said.

NPS Contribution Hike

The state government has also decided to increase its own contribution to the National Pension System (NPS) from 10 per cent to 14 per cent, while state employees will have to pay 10 per cent, according to the official release.

LTC Cash Conversion On 7th Pay Commission Now

The state government has also decided to calculate LTC cash conversion for 10 cumulated leaves on the revised pay scale of the 7th Pay Commission, whereas previously it was based on the pay scale of the 6th Pay Commission.

4% DA Hike For Central Government Employees Likely Soon

The Centre is likely to announce a 4 per cent hike in dearness allowance (DA) for central government employees in March 2024, according to media reports. After the 4 per cent DA hike, dearness allowance and dearness relief will increase to 50 per cent.

The quantum of hike in DA and dearness relief (DR) is decided by the central government on the basis of the All-India CPI-IW data.

The 12-month average of the Consumer Price Index for Industrial Workers (CPI-IW) stood at 392.83. As per this, DA is coming to 50.26 per cent of the basic pay.

DA and DR are hiked twice a year — January and July.

In the last hike in October 2023, the DA was increased by 4 per cent to 46 per cent. Given the current inflation rate, the next DA hike is expected to be 4 per cent.