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The Gujarat government recently made a significant announcement regarding a four percent increase in dearness allowance (DA) and dearness relief (DR) for state employees and pensioners. This decision comes as part of efforts to address economic concerns and enhance the financial well-being of government personnel.
Impact on State Employees and Pensioners
Following this hike, the dearness allowance for state government employees will rise to 46 percent from the previous 42 percent. It’s worth noting that DA is typically provided to government employees, while DR is extended to pensioners. This adjustment is effective July 1, 2023, with employees set to receive arrears for the past eight months.
Benefits and Distribution of Arrears
Approximately 4.45 lakh state government employees and 4.63 lakh pensioners are expected to benefit from this decision. The arrears for the eight months, spanning from July 2023 to February 2024, will be disbursed in three installments along with regular salaries.
Arrears Disbursement Schedule
The distribution plan for arrears entails specific timelines. The difference amount for the period between July 2023 and September 2023 will be included in the March 2024 salary. Similarly, arrears for October to December 2023 will accompany the April 2024 salary. Additionally, dearness allowance arrears for January and February 2024 will be integrated into the May 2024 salary for the employees.
Increase in NPS Contribution and LTC Calculation
Alongside the increase in dearness allowance (DA) and dearness relief (DR), the state administration has opted to raise its contribution to the National Pension Scheme (NPS) from 10 percent to 14 percent. Simultaneously, state employees will now contribute 10 percent.
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Furthermore, there’s a notable shift in the calculation methodology for LTC cash conversion. Previously based on the pay scale of the 6th Pay Commission, it will now be computed on the revised pay scale of the 7th Pay Commission, signaling an adjustment in policy to align with current standards.
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