7th Pay Commission DA Hike Latest Update: GOOD news for lakhs of Central government employees

In a piece of good news for lakhs of Central government employees, the government on Wednesday (July 14) approved a hike in Dearness Allowance (DA) from 17 per cent to 28 per cent. According to sources, the Union Cabinet has taken a decision to hike DA after it was put on hold last year amid the COVID-19 pandemic.

However, it is pertinent to mention that it is not yet clear if central government employees will get the hiked DA benefit from September.

The comes even as several media reports are speculating that dearness allowance benefits under the Seventh Central Pay Commission (7th CPC) would be restored July.

It may be recalled that DA was hiked by 4 per cent in January 202. The DA was again hiked in June 020 by 3 per cent. As of late, in January 2021, the DA was further increased by 4 per cent, according to reports.

Since the DA is used by Central government employees to combat the rising prices due to inflation, the DA is calculated and revised twice a year. Revisions take place in January and July. In 2006, the government revised the way DA was calculated. Here's the new formula

1) For Central government employees: DA per cent = {(Average of AICPI (Base Year -2001=100) for the past 12 months -115.76)/115.76} x 100

2) For Central public sector employees: DA per cent = {(Average of AICPI (Base Year 2001=100) for the past 3 months -126.33)/126.33} x 100

Notably, the salary of Central government employees will increase significantly after the DA hike. The hike in DA will also directly affect the LTA, PF and gratuity of Central government employees.