7th Pay Commission: After the central government increased the dearness allowance by 4 per cent in the previous hike in March 2023, the Centre is again likely to hike DA by 3-4 per cent effective July 1, according to media reports. The DA, which is provided to employees and pensioners to compensate them for rising prices, is revised twice a year — January and July.
The last revision in DA was done in March raising it by 4 per cent, which became effective from January 1, 2023. After the 4 per cent hike, the DA of central government employees increased to 42 per cent. Before this, the DA was hiked in September 2022 by 4 per cent, which became effective from July 2022.
Now, for the 7th Pay Commission employees, the DA is expected to hike by another 3-4 per cent, to be effective from July, according to the reports. Currently, as per the latest data, there are 47.58 lakh central government employees and 69.76 lakh pensioners.
Dearness allowance (DA) is given to government employees, while dearness relief (DR) is for pensioners. The DA is given to employees based on the basic pay of the employees, while the DR is given on the basis of a basic pension.
How DA Hike Is Calculated?
The central government revises the DA and DR for employees based on a formula. Following is the formula:
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.
Last week, the Jharkhand government increased the dearness allowance for its employees to 42 per cent from 34 per cent. The decision to hike the DA rate was taken in the state cabinet meeting, chaired by Chief Minister Hemant Soren.
Last month, the Himachal Pradesh government hiked the dearness allowance (DA) by 3 per cent for state employees and pensioners. They will now receive a 34 per cent DA, against 31 per cent earlier.
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