In 2006, the central government had revised the formula to calculate the DA and DR for central government employees and pensioners.
7th Pay Commission: The Modi government is likely to announce the DA (Dearness Allowance) Hike for all the Central government employers and pensioners soon. According to the sources, the government is mulling to announce the jump in DA by the end of this month. The DA hike, which will be effective from July 1, 2023, is expected to be 3 per cent, according to media reports. After the increase, the dearness allowance will reach 45 per cent.
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.
Last month, All India Railwaymen Federation General Secretary Shiva Gopal Mishra told PTI that the Federation is demanding a four percentage point hike in dearness allowance. But, the dearness allowance hike works out to be a little over three percentage points. “DA is likely to be increased by three percentage points to 45 per cent.”
In 2006, the central government had revised the formula to calculate the DA and DR for central government employees and pensioners.
Dearness Allowance Percentage = ((Average of All-India Consumer Price Index (Base Year 2001=100) for the past 12 months -115.76)/115.76)x100.
For Central public sector employees: Dearness Allowance Percentage = ((Average of All-India Consumer Price Index (Base Year 2001=100) for the past 3 months -126.33)/126.33)x100.