7th Pay Commission: If the DA is hiked by 4%, it will lead to a massive salary hike for the Central government employees and there will be a potential increase in the current DA from 42% to 46%.
7th Pay Commission Latest Update Today: As crores of Central government employees and pensioners are waiting for an announcement on the Dearness Allowance hike, it is being speculated that the Centre might increase DA by 4%, as per a report by CNBC TV 18. Once it is implemented, the DA hike will be effective from July 1, 2023. Even as there is no official statement on the matter as yet, there are speculations that the long-awaited announcement might be announced in October itself.
If the DA is hiked by 4%, it will lead to a massive salary hike for the Central government employees and there will be a potential increase in the current DA from 42% to 46%. Reports also the Centre might announce the DA hike between Navratris and Diwali.
What is DA and DR?
The Central government employees must note that the Dearness Allowance (DA) is a cost-of-living adjustment allowance granted by the Centre to public sector employees and pensioners. And Dearness Relief (DR) is given to the retired employees.
Why Centre Revises DA/DR?
The Central government revises the DA/DR rate every six months to counteract the diminishing purchasing power of monthly salary and pension wealth caused by inflation.
How Are DA, DR Calculated?
In general, the DA is calculated as a percentage of the basic salary and the formula for central government employees is as follows:
Dearness Allowance percent = ((Average of AICPI (Base Year 2001=100) for the past 12 months – 115.76) / 115.76) * 100
How Much Salary Will Increase?
For the employees with a minimum basic salary of Rs 18,000, the current DA at 42% gives a monthly increase of Rs 7,560. With the new DA hike at 46%, this monthly increase will reportedly increase to Rs 8,280. Hence, the employees with this basic salary can anticipate an annual salary increase of Rs 8,640.
For other employees with a maximum basic salary of Rs 56,900, the current DA at 42% gives Rs 23,898 to their monthly earnings. After the DA hike to 46%, this monthly increase will reportedly increase to Rs 26,174. Hence, those with this higher basic salary can look forward to a substantial annual salary increase of Rs 27,312.
Last DA Hike in March 2023
The Central government in March this year granted an additional instalment of Dearness Allowance to Central Governments employees and Dearness Relief to Pensioners with effect from January 1, 2023. The additional instalment of DA led to an increase of 4% over the existing rate of 38% of the Basic Pay/Pension, to compensate against price rise.