7th Pay Commission DA Hike: How much of Dearness Allowance increase is expected, calculation and expected time

The announcement of the Dearness Allowance (DA) and Dearness Relief (DR) hikes by the Government is eagerly anticipated by central government employees and pensioners. A decision in this regard will be made during a Union Cabinet meeting presided over by the Prime Minister. 

However, no formal announcement has been made regarding the expected date for the DA/DR hike decision. 

Expected Hike Date of DA  

The DA/DR increase is usually announced in March and September. As September has already begun and the festival season is just around the corner, Central Government Employees anticipate receiving the DA hike announcement notification this month.

How much of DA increase is expected? 

The government is expected to raise the DA rate from 34% to 38% shortly. A similar increase in the DR rate for retirees is also expected. 

How is the DA increase calculated? 

The government usually revises the DA/DR rate every six months. This is done to compensate for the loss in purchasing power of the monthly salary/pension wealth due to inflation. The DA/DR rate benefits both Central Government employees and retirees.  

The formula recommended by the 7th Pay Commission is used to compute DA/DR. Currently, the DA is regulated and determined by the rate of inflation as measured by the All India Consumer Price Index for Industrial Workers (CPI-IW) published by the Labour Bureau (Shimla), Ministry of Labour and Employment. 

CPI-IW is used to calculate DA for workers in the industrial sectors, as well as to fix and revise minimum wages in scheduled employment.