7th Pay Commission Latest Update: The dearness allowance is likely to be increased by 4 per cent, which will take the overall DA to 38 per cent.
7th Central Pay Commission Latest Update, 7th Pay Commission DA Hike News: Central government employees may soon get a good news regarding the much-awaited hike in dearness allowance, which will eventually lead to an increase in their salaries. The update on 4 per cent hike in DA is expected anytime soon since the increase in allowance is revised twice a year -- January and July.
The speculated rise in the DA was also indicated in the All-India Consumer Price Index (Industrial Worker) data for the month of May. AICPI is the primary parameter on the basis of which the DA is revised by the central government.
Now, as the AICPI is prevailing high above the RBI’s tolerance level, the chances of government employees getting a raise in dearness allowance is also high. The retail inflation in June stood at 7.01 per cent, which is above the RBI’s target level of 2-6 per cent.
Reports suggest that the dearness allowance may be increased by 4 per cent, which will take the overall DA to 38 per cent. In March this year, the Union Cabinet had approved a DA hike of 3 per cent under the 7th Central Pay Commission, taking the overall DA to 34 per cent of the basic income. Over 50 lakh government employees and 65 lakh pensioners are being benefited from this move.
Pending DA and DR arrears
Reports also suggest that the central government may also resolve the issue of pending DA arrears, following which the central government employees will receive Rs 2 lakh in pending arrears in one go.
The Centre had held back three instalments of DA and DR for January 1, 2020; July 1, 2020; and January 1, 2021, in view of the unprecedented situation which arose due to the COVID-19 pandemic. In a reply to a query in the Rajya Sabha in August 2021, Finance Minister Nirmala Sitharaman said the holding back of DA and DR saved about Rs 34,402 crore.
It is also reported that pensioners have written a letter to Prime Minister Narendra Modi, urging his intervention on the issue of DA arrears pending for 18 months. As per media reports, the central government may address the issue in the month of August.
How is DA calculated?
The formula to calculate the DA and DR for central government employees and pensioners was revised by the central government in 2006.
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 public sector 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.