Bank and Government Employee Salary Increase and DA Increase this Month

Bank and Government employees’ salary increase and DA increase this month

DA for Bank Employees

The Bank and government employees will leap big this month as the government (Union Cabinet) has introduced new salaries and DA. The employees are entitled to the new salaries before the Diwali festivals. The Dearness Allowance (DA) is increased by 3% since July 1. It was first increased at the rate of 28% with the arrears available. Bank and central government employees will enjoy the new changes from August to October 2021. This is available for bank employees using the 11th BPS salary structure.

The decision will benefit more than 8 lakh employees in India. Note the new DA increase will also increase the net salary of the bank employees. The funds are linked to the basic monthly salary, thus increasing the monthly net pay.

What is Dearness allowance?

DA is a part or component of an employee’s salary which has a fixed percentage on the basic salary. The amount helps in hedging inflation. The Dearness allowance is linked to the daily cost of living of every employee. The amount differs based on the user’s location. The urban employee’s DA is different from semi-urban and rural area workers.

How to Calculate DA

  • DA% = (Average of AICPI (100) for the past 12 months -115.76)/115.76)*100 (Central Government employees)
  • DA% (Average of AICPI (100) for the past 3-months-126.33)/126.33)*100 for central public sector employees.
  • AICPI means All India Consumer Price Index

The AICPI is always released on the last working day of the month for the previous month. It’s based on three months or one year.

Points to Note on DA Increase

  • The Union cabinet has increased the DA and DR rates by 11 percent since it hasn’t been raised for the three installments due to the pandemic (Covid-19 pandemic).
  • The DA is revised two times every year in January and July.
  • The Dearness allowance is a soft landing or cushion against inflations.
  • DA is different for all employees based on the location (semi-urban, urban and rural area).
  • The 2021 financial year will cost the exchequer Rs—22,934.56 crore from July to February.
  • The government and bank employees will receive a 285 DA on the basic pay.
  • The government announced the rate of DA and DR would stay constant at 17% the period of January 1st, 2020 to June 30th, 2021. This eliminates the dues received by government employees since they will receive 17% DA.
  • The new changes will take effect in July, clearing the arrears for January 2020 to June 2021. This nullifies the 4% increase announced last year.


  1. Who will benefit from the new salary and DA increase?

    Bank and central government employees will benefit from the new salary and DA hikes from July 2021.

  2. How many people/employees is the government targeting?

    The government will raise the salary of more than 8lakhs employees in India.

  3. What determines the DA for employees?

    The Dearness allowance is different for all employees. DA is calculated based on the location of the employee.

  4. DA Full Form

    Dearness allowance (DA)

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