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7th Pay Commission DA hike: Central government employees and pensioners eyeing 4% hike; Check Salary Calculation, Expected Date and More india business news

Increase in DA of 7th Pay Commission:Central government employees should be ready for another increase dearness allowance (DA). The government generally adjusts DA twice a year, in January and July, with the announcement usually being made in March. Wondering how much your DA will increase this time? Let’s take a look at the calculation of DA hike.
Calculation of expected DA increase
According to ET, dearness allowance central government employees Determined using the latest Consumer Price Index for Industrial Workers (CPI-IW), which is published monthly. labor bureauA division of the Ministry of Labour. This calculation is done according to a specific formula applicable to both employees and pensioners Of the central government.
7th CPC DA%= [{12 month average of AICPI-IW (Base Year 2001=100) for the last 12 months – 261.42}/261.42×100]
It is important to note that this formula applies exclusively to central government employees and pensioners who receive salaries based on the recommendations of the 7th Pay Commission.

CPI-IW base year 2016=100
*CPI-IW base year 2001=100
January-23 132.8 382.46
February-23 132.7 382.17
March-23 133.3 383.90
April-23 134.2 386.49
May-23 134.7 387.93
June-23 136.4 392.83
July-23 139.7 402.33
August-23 139.2 400.89
September-23 137.5 396
October-23 138.4 398.59
November-23 139.1 400.60
December-23 138.8 399.74
Total 4713.98
average 392.83

Source: CPI-IW data published by Labor Bureau as quoted by ET
*The linking factor to convert base year 2016=100 to base year 2010=100 is 2.88.
DA%= (392.83-261.42)/261.42×100 = 50.26
Based on the calculations, with an average CPI-IW of 392.83 in the last 12 months, DA is calculated at 50.26% of the basic pay. Therefore, it is expected that the central government will increase the dearness allowance by 50%, ignoring the decimal points.
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At present, central government employees get 46% dearness allowance, while pensioners get the same percentage of dearness relief (DR). The most recent DA hike was announced by the central government on October 18, 2023, and it became effective from July 1, 2023.
At present, it is expected that both Dearness Allowance (DA) and Dearness Relief (DR) for central government employees and pensioners will be increased by 4%. This change is expected to take effect from January 1, 2024.
Impact on salaries of central government employees
All government employees and pensioners receive Dearness Allowance (DA) and Dearness Relief, which are components of their salaries aimed at mitigating the impact of inflation. These allowances are adjusted from time to time to revise the effective pay of government employees.
For example, let us consider a central government employee with a basic salary of Rs 53,500 per month. At 46% DA rate, his dearness allowance comes to Rs 24,610. If the DA rate increases by 50 percent, their DA will increase to Rs 26,750. Therefore, with a 4% increase in DA, his salary will increase by Rs 2,140, ​​which will be calculated as the difference between Rs 26,750 and Rs 24,610.
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Impact on pension of central government pensioners
Dearness relief for central government pensioners operates similarly to DA. It is expected that soon DR will also increase by 4%, resulting in increase in monthly pension for pensioners.
For example, suppose a central government pensioner gets a basic pension of Rs 41,100 per month. At 46% DR rate, the pensioner currently gets Rs 18,906 in dearness relief. If DR increases to 50%, the pensioner will get Rs 20,550 as dearness relief every month. As a result, with a 4% increase in DR, the pension will increase by Rs 1,644 per month.
Retroactive application and timing
It is important to note that the DA and DR hike will be applicable to central government employees and pensioners with retrospective effect from January 1, 2024. Therefore, if the Center announces DA now, employees and pensioners will get the arrears of the previous months.
Next DA hike expected
Based on past events, it is possible that the central government will announce the DA hike soon. For example, the DA hike effective January 1, 2023, was announced on March 24, 2023. Similarly, the DA increase, effective from July 1, 2023, was announced on October 18, 2023. More than one crore people are expected to benefit from this change. Increase in DA and DR of central government employees and pensioners.

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