DA Hike 7th Pay Commission: Central government employees and pensioners are waiting in anticipation for another hike in their Dearness Allowance (DA) and Dearness Relief (DR). They are hoping for another DA hike especially in the scenario of the latest All-India Consumer Price Index (AICPI) data released by the government. AICPI is a key factor in determining how much DA hike will be implemented, and the data from April indicates that the government may go for another DA hike in the coming months. As per several media reports, the Centre is likely to implement another DA hike for government employees on July 1, which is next month.
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How Much DA Hike is Expected?
According to a report by Zee News, the government may consider a DA hike of as much as 5 per cent in July. This means central government employees will get a DA of 39 per cent if the report is to be believed. The AICPI in January and February were 125.1 and 125, respectively, while in March it rose to 126. The AICPI in April increased to 127.7, due to the rising inflation. Now, if the AICPI remains to that level, DA hike of 5 per cent is likely. The CPI-based inflation in April stood at an eight-year high of 7.79 per cent.
Currently, government employees get a DA of 34 per cent on their basic salary. If the DA hike of 5 per cent is implemented, they are going to get a 39 per cent dearness allowance on top of their basic pay. Dearness allowance (DA) is given to government employees, while dearness relief (DR) is for pensioners. The government had in March this year revised the DA, which then rose by 3 per cent to stand at 34 per cent of an employee’s basic salary. This was done due to rising prices, and the central government hiked DA by 3 per cent to compensate the inflation rate. The April AICPI has fuelled rumours that the government may consider a DA hike of 5 per cent in July.
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How is DA under 7th Pay Commission Calculated?
In 2006, the central government had revised the formula to calculate the DA and DR for central government employees and pensioners.
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.
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Will the Government go for a DA Hike in July?
The government hikes DA every year in January and July to set off inflation. Therefore, since the retail inflation is at a years-high, the chances of a hike in dearness allowance are also strong. It must be noted that Dearness Allowance varies from employee to employee based on whether they work in urban sector, semi-urban sector or the rural sector.
