Big news for 7.5 lakh government employees in Madhya Pradesh! The transport and house rent allowance has been increased after 15 years. The Mohan government approved this decision in the cabinet meeting.
Transport and Disability Allowance Increased
The transport allowance for employees has been increased from ₹200 to ₹384. Additionally, the allowance for disabled employees has been raised from ₹350 to ₹675.
Government to Bear ₹1500 Crore Additional Burden
After this decision, the Mohan government will bear an additional burden of ₹1500 crore. Minister Kailash Vijayvargiya informed that earlier, employees received allowances based on the Sixth Pay Commission. Now, they have been linked to the Seventh Pay Commission.
House Rent Allowance (HRA) Based on Basic Salary
The state government has approved changes in allowances for government employees. The HRA will now be given based on the basic salary under the Seventh Pay Commission:
A-category cities – 10% increase
- Advertisement -B-category cities – 7% increase
C and D-category cities – 5% increase
Other Allowance Updates
There will also be an increase in the following allowances:
Daily allowance
Vehicle allowance
Food allowance
Permanent travel allowance
Employees transferring to a new location will receive an allowance based on inflation for carrying household goods.
What is Dearness Allowance (DA)?
Dearness Allowance (DA) is paid by the government to its employees and pensioners to help them cope with inflation. It adjusts their salary to match rising prices. Since inflation impacts employees differently based on their location, DA varies depending on whether they live in urban, semi-urban, or rural areas. Due to the COVID-19 pandemic, the central government had postponed the DA hike. However, recent updates suggest that central government employees may receive arrears in DA.
Calculation of Dearness Allowance (DA)
Dearness Allowance (DA) is calculated twice a year, in January and July, to adjust for price rises. The formula to calculate DA was updated in 2006:
For Central Government Employees:
DA% = [(Average of AICPI for the last 12 months – 115.76) / 115.76] x 100For Public Sector Employees:
DA% = [(Average of AICPI for the last 3 months – 126.33) / 126.33] x 100
Here, AICPI stands for the All-India Consumer Price Index.
