7th Pay Commission: Earlier, it was reported that the Centre would approve 3 per cent hike for government employees, however, the latest reports suggest that DA hike will be hiked by 4 per cent.
New Delhi: For those Central government employees who are waiting for an announcement on hike in Dearness Allowance, here comes a big update for them. The Central government is likely to announce DA hike for them during the Union Cabinet meeting on Wednesday. As per reports, the Union Cabinet will meet later in the day to discuss various matters during which an announcement on DA hike is expected for government employees.
Earlier reports suggested that the Centre would approve 3 per cent hike for government employees, however, the latest reports suggest that DA hike will be hiked by 4 per cent.
“The CPI-IW for June 2023 was released on July 31, 2023. We are demanding a four percentage point hike in dearness allowance. But the dearness allowance hike works out to be a little over three percentage points. The government does not factor in hiking DA beyond the decimal point. Thus DA is likely to be increased by three percentage points to 45 per cent,” All India Railwaymen Federation General Secretary Shiva Gopal Mishra was quoted as saying by PTI.
Why Is DA Given to Govt Employees?
For general information, the DA is granted to government employees and pensioners to offset the impact of inflation as it leads to a rise in the cost of living, and this is measured by the Consumer Price Index for Industrial Workers (CPI-IW). The DA hike is given twice a year to account for these changes.
How is DA Calculated?
Dearness allowance for both employees and pensioners is calculated based on the most recent Consumer Price Index for Industrial Workers (CPI-IW), which is released every month by the Labour Bureau.
Last time, the DA was hiked by 4 per cent to 42 per cent in March 2023, with the revised rate becoming applicable from January 2023. As another 4 per cent DA hike is expected now, it will be applicable from July 2023.
How Much Salary Will Increase?
The latest DA hike will lead to enhanced monthly salaries for central government employees from November, along with arrears for the period from July to October.
With 42 per cent DA, employees with a minimum basic salary of Rs 18,000 get additional Rs 7,560 per month. However, with the proposed 4 per cent hike, this monthly salary could rise to Rs 8,280, resulting in an annual salary boost of Rs 8,640.
And for other employees with a higher basic salary, say Rs 56,900, the current DA at 42 per cent adds Rs 23,898 to their monthly earnings. After a 4 per cent hike, this amount would increase to Rs 26,174, leading to an annual salary increase of Rs 27,312.