It hasn’t been long since the dearness allowance or DA of Central government employees was hiked by four per cent, in early March this year. Now, the Government has decided to increase the gratuity limit of these employees by 25 per cent, starting 1 January, 2024. That means, the employees will now get Rs 25 lakh instead of the previous Rs 20 lakh as gratuity.
As per an official communiqué from the Ministry of Personnel, Public Grievances, as well as the Pensions Department of the Pension & Pensioners’ Welfare, this increment has been decided on the basis of the recommendations of the Seventh Central Pay Commission (CPC). According to the same, the maximum limit of retirement gratuity and death gratuity under the Central Civil Services (Pension) Rules, 2021 or the Central Civil Services (Payment of Gratuity under National Pension System) Rules, 2021, would be increased by 25 per cent, with effect from 1 January 2024.
The increment in gratuity limit was mooted in April 2024, but was put on hold in May.
The Union Cabinet had approved the additional instalment of dearness allowance for Central government staff and dearness relief for pensioners on 7 March. With the four per cent hike, the DA/DR had risen to 46 per cent of the basic pay or pension, to help existing employees and retired staff to deal with rising prices. This would cost the Government Rs 12,868 per year.
