7th Pay Commission DA Hike Fitment Factor News: Inflation remains above the level of 2 to 6 percent. According to RBI, this rate of inflation is higher than normal.
This is the reason why there can be a 5 percent increase in Dearness Allowance (DA) of government employees (DA Hike 5%). Dearness Allowance helps the employees to deal with inflation. DA is revised twice a year in January and July. Earlier this year, the government had increased the DA by 3 per cent.
Retail inflation in May stood at 7.04 per cent, which is much higher than the RBI’s comfort level of 2-6 per cent. This is the highest level in eight years. DA is revised based on changes in All India Consumer Price Index (AICPE). According to the data of April, the AICPI index has come down to 127.7. It has increased by 1.35 percent. That is, now if the figures for May and June cross 127, then the DA can increase by 5 percent.
50 lakh employees will benefit
The government increases DA twice a year. At the beginning of this year, the government has increased the DA once. Presently DA is 34 per cent. If it is increased by another 5 per cent, then it will become 39 per cent. This decision will benefit more than 50 lakh government employees and 65 lakh pensioners.
Salary will increase so much
It is believed that from July 1, the DA of the employees may increase. Central government employees used to get 34 percent DA earlier, now they will get 39 percent DA. The basic salary of the employees is Rs 56,900, they will get DA of Rs 22,191 on getting 39 percent dearness allowance. At present, Rs 19,346 is being received at the rate of 34 percent. An increase of 5 per cent DA will result in an increase of Rs 2,845 in salary. That is, there will be an increase of about Rs 34,140 annually.
According to media sources, lakhs of central government employees who are waiting for the announcement of hike in their dearness allowance may get a huge hike in DA in July. The most recent All-India CPI-IW data gives rise to this more optimistic outlook. The AICP Index, a key component in setting up DA, shows that the DA of the central government was expected to increase in May. In July, the government may have more good news to share with the workforce.
When will the government announce 5% DA hike?
According to the latest media sources, dearness allowance may increase by 5 percent in July (DA 5% in July). This means that the total DA can be up to 40%. According to many media sources, the administration may announce to increase the DA on July 31. The employees will have to wait for the official confirmation of these speculations.
Central government employees get an increase in dearness allowance twice a year. The first is given from January to June and the second from July to December. In April 2022, the All India CPI-IW rose by 1.7 points to 127.7.
The 1-month percentage change increased by 1.35 percent, compared to an increase of 0.42 percent between the same months a year ago, according to data from the Ministry of Labor & Employment.
As per the ministry’s latest data, the AICPI figures for May are 129, which certainly indicates a higher or 6 per cent higher than the estimated DA, according to several media websites.
The hike in dearness allowance for the year 2022 was announced for the first time in March. The AICPI value in December 2021 was 125.4. But it fell by 0.3 points to 125.1 in January 2022. In February 2022, the all-India CPI-IW fell 0.1 points to 125.0.
In terms of 1-month percentage change, it fell 0.08 percent from the previous month, compared to a 0.68 percent increase between comparable months a year ago. There was an increase of 1 point in March. 126 is the AICPI index value for March.
Update on fitment factor, minimum salary will increase by Rs 8000
The Union Cabinet had approved the recommendations of the Seventh Pay Commission in June 2017 with 34 amendments. The basic salary of the entry level was increased from Rs 7,000 per month to Rs 18,000, while that of the highest level i.e. secretary was increased from Rs 90,000 to Rs 2.5 lakh. The starting salary for Class 1 officers was Rs 56,100.
The government may soon give approval to increase the fitment factor. With this, the minimum basic pay will be increased from Rs 18,000 to Rs 26,000. The government had earlier increased the entry level basic pay from Rs 7,000 per month to Rs 18,000 in the year 2017.
If the government announces an increase in the fitment factor of central employees, then their salary will increase. At present, the employees are getting salary on the basis of 2.57 percent under the fitment factor, which is increased to 3.68 percent, then the minimum wage of the employees will increase by Rs 8,000. This means that the minimum salary of central government employees will be increased from Rs 18,000 to Rs 26,000. At present the minimum basic pay is Rs 18,000.
Salary will increase this much if fitment factor is 3.68 percent
If the fitment factor is increased to 3.68 per cent, then the basic pay of the employees will be Rs 26,000. Right now if your minimum salary is Rs 18,000, you will get Rs 46,260 (18,000 X 2.57 = 46,260) as per 2.57 fitment factor excluding allowances. Now if the fitment factor is 3.68 then your salary will be Rs 95,680 (26000X3.68 = 95,680).
