7th Pay Commission Dearness Allowance Hike Latest News on August 6: The Central Government is expected to hike dearness allowance by 3% to 45% for Central Government Employees, according to a report by News Agency PTI.

The report said that the Union Government is likely to increase the DA and Dearness Relief (DR) rates for its over 1 crore employees and pensioners by 3 percentage points to 45 per cent from the existing 42 per cent as per the agreed formula for the purpose.

The DA/DR rate for employees and pensioners is decided basis of the latest All India Consumer Price Index for Industrial Workers (AICPI-IW) released by the Labour Bureau, a wing of the Labour Ministry, every month.

“The CPI-IW for June 2023 was released on July 31, 2023. We are demanding a four percentage point hike in dearness allowance. But the dearness allowance hike works out to be a little over three percentage points. The government does not factor in hiking DA beyond the decimal point. Thus DA is likely to be increased by three percentage points to 45 per cent,” the report quoted All India Railwaymen Federation General Secretary Shiva Gopal Mishra as saying.

Also Read: 7th Pay Commission: Why Dearness Allowance may be increased by 3% and not 4%?

Mishra further said that the expenditure department of the Finance Ministry will formulate a proposal to hike DA along with its revenue implication and will put up the proposal before the Union Cabinet for approval.

When announced, the DA/DR hike will be effective from July 1, 2023. At present, there are over 1 crore Central Government Employees and Pensioners. They are getting DA/DR at the rate of 42% of basic pay/pension.

The last DA hike was done on March 24, 2023, and was effective from January 1, 2023. Back then, the Central Government increased DA by 4% to 42% on the basis of the percentage increase in the 12 monthly averages of the All India Consumer Price Index for the period ending December 2022.

Also Read: Dearness Allowance Hike News: Will DA jump to 46%? What AICPI-IW data hints at

The Government provides DA to employees and pensioners to compensate them for rising prices. As the cost of living increases over a period of time, it gets reflected through CPI-IW. The allowance is revised periodically twice a year.