7th Pay Commission Latest Update: To provide relief to central employees and pensioners from inflation, the central government can announce a 4% increase in DA and DR.
7th Pay Commission Latest Update: To provide relief to central employees and pensioners from inflation, the central government can announce a 4% increase in DA and DR.
Although no official statement has been issued regarding this yet, it is being speculated that what was being awaited for a long time may be revealed in October.
If media reports are to be believed, it appears that the central government is considering increasing DA by 4%, which could potentially increase from the current 42% to 46%. However, the final decision on this will be taken by the government, which will be subject to the approval of the Cabinet.
The increase in dearness allowance is scheduled to be effective from July 1, 2023. The DA rate from January to June will be determined by the All India Consumer Price Index (AICPI).
Let us calculate the minimum and maximum basic salary here:
For those with minimum basic salary of Rs 18,000, the current DA increases by Rs 7,560 per month at 42%. With the new DA rate at 46%, this monthly increase will reportedly increase to Rs 8,280. Therefore, employees with this basic salary can expect an annual salary increase of Rs 8,640.
For individuals with a maximum basic salary of Rs 56,900, the current DA at 42% adds Rs 23,898 to their monthly earnings. After the 46% hike in DA, this monthly increase will reportedly increase to Rs 26,174. Due to which people with this high basic salary can expect a substantial annual salary increase of Rs 27,312.
What are DA and DR?
Dearness Allowance (DA) is a cost of living adjustment allowance given by the government to public sector employees and pensioners. Dearness Relief (DR) is similar in nature and benefits central government pensioners.
Why does the government amend DA/DR?
The government regularly revises the DA/DR rate every six months to deal with the declining purchasing power of monthly salary and pension money due to inflation.
How is DA calculated?
DA is calculated as a percentage of basic pay. The formula for Central Government employees is as follows:
Dearness Allowance Percentage = ((Average of AICPI (base year 2001=100) for last 12 months – 115.76) / 115.76) * 100
