7th Pay Commission: The hike in dearness allowance and dearness relief for employees and pensioners are worked out on the basis of the latest Consumer Price Index for Industrial Workers (CPI-IW) brought out by the Labour Bureau every month.
New Delhi: Here comes a big update for crores of Central government employees and pensioners who are waiting for an announcement on the DA hike from the Narendra Modi government. The dearness allowance is likely to be hiked after G20 Summit 2023 concludes in the national capital. The latest DA hike, which will be effective from July 1, 2023, is expected to be 3 per cent this time, as per Finance Ministry officials. After the 3% hike, the dearness allowance will reach 45 per cent for the government employees.
How Much Salary Will Increase?
If media reports are to be believed and 3% DSA hike is announced, then the salary of the Central government employees will surely be increased. If one employee’s salary is Rs 50,000 per month and has Rs 15,000 as the basic pay. He or she will now get Rs 6,300, which is 42 per cent of the basic pay. However, after the expected 3 per cent hike, the employee will get Rs 6,750 per month, which is Rs 450 more per month. Hence, if an employee gets Rs 50,000 salary a month with Rs 15,000 as the basic pay, his or her salary will rise by Rs 450 per month.
How Is DA Hike Calculated?
The hike in dearness allowance and dearness relief for employees and pensioners are worked out on the basis of the latest Consumer Price Index for Industrial Workers (CPI-IW) brought out by the Labour Bureau every month. Notably, this Labour Bureau is a wing of the Labour Ministry.
As per the latest data that was released in July 2023, the All-India CPI-IW for July 2023 rose 3.3 points to 139.7. On 1-month percentage change, the index increased by 2.42 per cent with respect to previous month compared to increase of 0.90 per cent recorded between corresponding months a year ago.
What is Dearness Allowance?
The Central government employees must be knowing that the DA is given to government employees, while DR is given to pensioners. DA and DR are generally hiked twice a year — January and July. Right now, over one crore central government employees and pensioners are getting a 42 per cent dearness allowance.
How Centre Decides On DA Hike?
In general, the Finance Ministry decides on the DA and DR hike based on the percentage increase in 12 monthly average of the All India Consumer Price Index (AICPI) for the period ending June 2022. Even as the central government revises the allowances on January 1 and July 1 every year, the decision is generally announced in March and September.