7th Pay Commission Dearness Allowance Hike Latest News (September 18, 2023): As the festival season 2023 has started with Ganesh Chaturthi celebrations across India, a festive treat in the form of Dearness Allowance hike is expected to come to central government employees soon.
Various reports have suggested that the Central Government may hike the DA rate for its employees and the Dearness Relief (DR) rate for pensioners by 4%. However, it was earlier expected that the Government may hike the DA/DR rate by 3%.
If a 4% hike takes place, Central Government Employees’ effective DA rate will jump to 46% from the current 42%.
The rate of DA is decided on the basis of All India Consumer Price Index for Industrial Workers (AICPI-IW) data. The current formula for deciding the DA rate is as per the recommendation of the 7th Pay Commission. According to the AICPI-IW data and the formula recommended by the 7th Pay Commission, the DA hike could be around 4%.
However, according to All India Railwaymen Federation General Secretary Shiva Gopal Mishra, the expected DA hike works out to be 3% only. A final decision on this will be taken by the Union Cabinet chaired by the Prime Minister.
It is expected that the Government may announce the new DA/DR rate to be effective from 1 July 2023 by this month’s end or in early October.
How will monthly pay increase?
Let’s understand this with an example. Suppose a Central Government Employee is getting a basic salary of Rs 25,600 per month. At the current rate of 42%, this employee is eligible for a dearness allowance of Rs 10,752 (42% of Basic Pay). However, if the DA jumps to 46%, he will get Rs 11,776 as dearness allowance, which will effectively increase his monthly pay by Rs 1024 (Rs 11,776-Rs 10,752).
Last year, the Government announced the DA hike to be effective from 1 July 2022 on September 28.