7th Pay Commission: The hike in dearness allowance and dearness relief will benefit 48.67 lakh central government employees and 67.95 lakh pensioners, respectively.
7th Pay Commission Latest News Today: In a festive cheer for cores of government employees ahead of Diwali, the Centre on Wednesday hiked dearness allowance by 4% to 46% of the basic salary and pay 78 days of salaries as a bonus for non-gazetted railway staff. Giving details, Union Information and Broadcasting Minister Anurag Thakur said the increase in dearness allowance and dearness relief will benefit 48.67 lakh central government employees and 67.95 lakh pensioners, respectively.
The Centre said the additional instalment of Dearness Allowance (DA) and Dearness Relief (DR) will be applicable from July 1, 2023.
Why DA And DR Are Given to Employees?
DA and DR are given twice a year to compensate employees and pensioners, respectively, for price rise. The combined impact on the exchequer on account of both DA and DR would be Rs 12,857 crore per annum.
The Centre had in March this year and September last year also increased the DA and DR by 4 percentage points.
Centre Announces Diwali Bonus For Railway Staff
The Central government also announced Diwali bonus for railway employees and Anurag Thakur said they will receive a bonus equivalent to their 78 days’ salaries, benefiting more than 11.07 lakh non-gazetted staff of the national transporter.
The Diwali bonus will benefit track maintainers, loco pilots, train managers (guards), station masters, supervisors, technicians, technician helpers, pointsmen, ministerial staff and other Group ‘C’ staff, excluding the RPF and RPSF personnel.
Thakur said the payment of the Productivity Linked Bonus (PLB) to the railway staff is expected to cost the exchequer Rs 1,968.87 crore, Thakur said.
From When Will DA Hike Be Paid To Employees?
Now, the Central government employees will receive 46% DA after the 4% DA hike on Wednesday. With the latest DA hike, the arrears from July 2023 onwards will also likely be disbursed with October salary. The arrear payment will be done to the government employees the on the basis of the percentage hike announced — for example – 4 per cent arrear will be paid, after the 4 per cent DA hike announcement.
How Much Salary to Increase After DA Hike?
At 42% DA and basic salary of Rs 18,000, the Central government employees got a hike of Rs 7,560. Now with the 4% hike, their minimum monthly basic salary will increase to Rs 8,280.
In the similar manner, at 42% DA and basic salary of Rs 56,900, the Central government employees got a hike of Rs 23,898. Now with the 4% hike, their minimum monthly basic salary will increase to Rs 26,174.
How is DA Hike Calculated?
In general, the DA and DR hike is calculated 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 Centre revises the allowances on January 1 and July 1 every year, the decision is generally announced in March and September.
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 government 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.