7th Pay Commission: How hike in VDA will impact salaries of CG employees

New Delhi, May 25: This news relating to the 7th Pay Commission will come as a relief for Central Government employees.

The Centre has announced an increase in the Variable Dearness Allowance (VDA) and the same ranges from Rs 105 to Rs 210 per month. The hike comes into effect from April 1 2021 and the revised rate will benefit 1.5 crore CG employees.

The Labour and Employment Ministry said in a notification, it will be for scheduled employment in the central sphere and applicable to the establishments under the authority of central government, railway administration, mines, oil fields, major ports or any corporation established by the central government. These rates are equally applicable to contract and casual employees/workers.

"The VDA is revised on the basis of average Consumer Price Index for industrial workers (CPI-IW) a price index compiled by Labour Bureau. The average CPI-IW for the months of July to December 2020 was used for undertaking the latest VDA revision," the statement also read.

The hike will lead to an increase in the rate of minimum wages for more than 15 million Central Sphere Employees and Workers. This would also lead in the increase in the provident fund, gratuity and other benefits that are linked to Dearness Allowance.

"The enforcement of Minimum Wages Act in the central sphere is ensured through the inspecting officers of Chief Labour Commissioner (Central) across the country for employees engaged in the scheduled employment in the central sphere," the ministry's statement also read.