7th Pay Commission Latest News: The government employees under the National Pension Scheme (NPS) will be benefitted from the recent proposals of the Central government in the Union budget for financial year 20109-20.

Though there was no announcement regarding the hike minimum pay and fitment factor beyond the 7th Pay Commission recommendations, Union Finance Minister Nirmala Sitharaman had proposed the cabinet decision taken to incentivise National Pension System (NPS) while presenting the Union budget.

She proposed to increase the limit of exemption from the current 40% to 60% of payment on final withdrawal from NPS.

Another proposal was made to allow deduction under section 80C for the contribution made to Tier II NPS account by Central Government employees.  If the lock-in period of the fund is three years, then it should be included under tax exemption.

She also proposed to allow a deduction for the employer’s contribution up to 14% of salary from the current 10%, in the case of Central Government employee.

There’s also a possibility of increment in the Dearness Allowance (DA) by 5% in the future.

According to the experts, there is an expectation of increment in DA up to five per cent. If the allowance hike is implemented, it will be the biggest increase in the DA since the implementation of the 7th pay scale in 2016.

Harishankar Tiwari, Former Secretary and Assistant Secretary of All India Audit and Accounts Association, AG Office Brotherhood, Allahabad, who also calculates government employees DA, told Zee Business Online that an increase in DA is possible because, according to the Consumer Price Index (CPI) data, inflation has increased in April 2019.

RK Verma, Coordinator of the State Employee Joint Council, UP said that “This time there is a more chance in DA increment because inflation rates have been increased in CPI data of April and May 2019.”

The Central Government had increased the DA by three per cent in January 2019 as per the 7th Pay Commission recommendations. Many states since then have followed the suit and increased the DA of the state government employees.