7th Pay Commission DA Hike for Central Govt Employees: Government employees have been anticipating an increase in Dearness Allowance or DA for a long time. The employees are waiting for the gift of Holi from the government before Holi. Although, there was a cabinet meeting today, but no announcement has been made by the government regarding DA.
DA Hike: What to expect this time?
Now there are reports that the Center may again increase the DA by 3 percent. With this new hike, DA will be 34 per cent of the basic pay. This decision will benefit more than 50 lakh government employees and 65 lakh pensioners.
A look at past DA hikes
In July, 2021, the Center increased dearness allowance and dearness relief from 17 per cent to 28 per cent. The central government had stopped DA for almost one and a half years due to the coronavirus pandemic. DA for central government employees increased to 31 per cent in October 2021 with a further hike of 3 per cent. The revised DA for central government employees has come into effect from July, 2021. Dearness relief for central government pensioners was also increased to 31 per cent with effect from July 1, 2021.
How is DA calculated?
Dearness Allowance is a component of the salaries of government employees and pensioners, aimed at mitigating the effects of inflation. The effective salary of government employees is revised from time to time to deal with the rising inflation rate. DA is revised twice every year – in January and July. Since DA is related to cost of living, it varies from employee to employee. It depends on whether they live in an urban area, work in a semi-urban area or a rural area.
Formula was changed in the year 2006
In 2006, the Central Government changed the formula for computing Dearness Allowance for Central Government employees and pensioners.
For Central Government employees: Dearness Allowance % = ((Average of All India Consumer Price Index (Base Year 2001=100) for the last 12 months -115.76/115.76)*100.
For Central Public Sector Employees: Dearness Allowance % = ((Average of All India Consumer Price Index for last 3 months (Base Year 2001=100)-126.33)/126.33)*100
Hike in Dearness Allowance: So how much will your salary increase?
A central government employee who gets Rs 18,000 per month will get a 3 per cent hike in his take-home pay. With 34 per cent DA, his salary will increase by Rs 6,120 per month. Since dearness allowance is linked to basic pay, the increase in DA will also increase the monthly provident fund (PF) and gratuity amount of central government employees. So, PF, Traveling Allowance and Gratuity will increase for employees and pensioners.
,