7th Pay Commission: Government employees have been waiting for the increase in Dearness Allowance (DA) for a long time. Now a new update has come regarding DA increase. Central government may announce DA hike for its employees between Navratri and Diwali
7th Pay Commission: Government employees have been waiting for the increase in Dearness Allowance (DA) for a long time. Now a new update has come regarding DA increase. The central government may announce DA hike for its employees between Navratri and Diwali. The DA hike, once announced, will be considered effective from July 1, 2023. Although earlier media reports had said that DA would be increased by 3 percent, it is believed that the increase in dearness allowance could be more than 3 percent.
DA may increase to 46 percent
There may be a 4 percent increase for central government employees as per the DA calculation formula based on the new Consumer Price Index for Industrial Labor (CPI-IW). After this increase, dearness allowance will reach 46 percent.
Government can announce this date
DA is given to government employees, while Dearness Relief (DR) is given to pensioners. DA and DR increase twice a year – January and July. At present, more than one crore central government employees and pensioners are getting 42 percent dearness allowance. In the last increase in March 2023, DA was increased by 4 percent to 42 percent. Considering the current inflation rate, the next DA hike is expected to be 4 percent.
These states have increased DA
Recently, many state governments like Madhya Pradesh, Odisha, Karnataka, Jharkhand and Himachal Pradesh have increased the dearness allowance for their state government employees.
How does the government decide on DA hike?
The DA and DR hike is decided on the basis of the percentage increase in the 12-month average of the All India Consumer Price Index (AICPI) for the period ending June 2022. However, the Central Government revises the allowances every year on 1 January and 1 July. Most of the governments have announced increase in DA in March and September-October. This is expected to happen this time too.
This is the formula to calculate DA
In the year 2006, the Central Government had revised the formula of DA and DR calculation for Central Government employees and pensioners.
Dearness Allowance Percentage = ((Average of AICPI (base year 2001=100) for last 12 months -115.76)/115.76)x100
For Central Public Sector Employees: Dearness Allowance Percentage = ((Average of All India Consumer Price Index (AICPI) (base year 2001=100) for last 3 months -126.33)/126.33)x100
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