7th Pay Commission: The Modi government is likely to make an announcement regarding the Dearness Allowance (DA), and Dearness Relief (DR) hike soon. Reports earlier suggested that the government is expected to make the announcement after Holi, which falls on March 8. The Central government employees must note that the authorities are planning to revive DA from current 38 percent to 42 percent.
If the reports come true, an employee who receives Rs 15,500 in 4200 Grade Pay would get a total pay of Rs 39, 835, by multiplying (Rs 15,500 x 2.57) as per the 6th Central Pay Commission. For the unversed, the common fitment factor, currently is at 2.57%.
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The dearness allowance for employees and pensioners are worked out on the basis of the latest Consumer Price Index for Industrial Workers (CPI-IW) brought out by the Labour Bureau every month. The Labour Bureau is a wing of the Labour Ministry.
Talking to PTI, All India Railwaymen Federation, General Secretary, Shiva Gopal Mishra said, “The CPI-IW for December 2022 was released on January 31, 2023. The dearness allowance hike works out to be 4.23 per cent. But the government does not factor in hiking DA beyond decimal point. Thus DA is likely to be increased by four percentage points to 42 per cent.”
Here are some of the key details:
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- The DA hike will be effective from January 1, 2023.
- Presently over one crore central government employees and pensioners are getting 38 per cent dearness allowance.
- The last revision in DA was done on September 28, 2022, which was effective from July 1, 2022
- The Centre had increased DA by four percentage points to 38 per cent based on the percentage increase in 12 monthly average of All India Consumer Price Index for the period ending June, 2022.
- The DA is provided to employees and pensioners to compensate them for rising prices.
- The cost of living increases over a period of time and is reflected through CPI-IW.
Dearness allowance calculation:
- For central government employees: The DA is calculated as — {(Average of the All-India Consumer Price Index (Base year -2001 =100) for the last 12 months -115.76)/115.76} x 100.
- For central public sector employees, the DA is calculated as — {(Average of the All-India Consumer Price Index (Base year -2001 =100) for the last 3 months -126.33)/126.33} x 100.
It is important to note that if DA is hiked to 42 per cent from 38 per cent, then employees’ dearness allowance on their salary will also jump. Notably, DA is different depending upon the level of the pay matrix of an employee.
