7th Pay Commission Dearness Allowance Hike Latest News (August 2, 2023): The month of August is here and the Central Government Employees are eagerly waiting for the announcement of the new Dearness Allowance rate. While the Government is expected to announce the new DA rate by next month, we look at the latest AICPI-IW data which serves as a deciding factor in DA rate calculation.
The Labour Bureau recently released the All India CPI-IW data for the month of June 2023. Compared to the previous month (May 2023), the index in June increased by 1.7% to 136.4. On a one-month percentage change, the AICPI-IW number increased by 1.26% with respect to the previous month (May).
According to a statement shared by the Labour Bureau, the maximum upward pressure in the current index came from inflation in food and beverages which contributed 1.62 percentage points to the total change.
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“At item level, Rice, Wheat, Atta, Arhar Dal, moong Dal, Fish Fresh, Poultry Chicken, Egg-Hen, Apple, Banana, Brinjal, Carrot, Ginger, Cauliflower, Chilli Green, Potato, Onion, Tomato, Cumin seed/Jira, Supari, Casual Wear, Canvas Shoes, Utensil, Medicine ayurvedic, etc. are responsible for the rise in index,” the Labour Bureau said in a press release.
“However, this increase was largely checked by Mustard Oil, Palm Oil, Sunflower Oil, Coconut Oil, Lemon, Mango, Kerosene Oil etc. putting downward pressure in the index,” it added.
The DA and Dearness Relief (DR) rates for Central Government Employees and pensioners are decided by the Union Government on the basis of the All India CPI-IW data.
The current rate of DA/DR provided to employees and pensioners is 42% of basic pay/pension. The latest AICPI-IW data indicate that the DA/DR rate may be increased by another 4% as the value of the total DA score increased to 46.24% in June.
However, it needs to be noted that the final confirmation of the DA hike is yet to come. As of now, there are various speculative reports claiming the DA may be raised by 4%. But the final decision in this regard has to be made by the Central Government. Till then, Central Government Employees and Pensioners will have to wait.
Also Read: 7th Pay Commission DA to increase over 50% – Will there be 8th CPC? Modi Govt replies
The DA/DR rate is revised by the Government on a half-yearly basis for Central Government Employees and Pensioners. The calculation of DA and payment of salary/pension to employees and pensioners is done basis the recommendations of the 7th Pay Commission.
DA/DR is paid against the Basic Pay/Pension in order to compensate for the erosion of the value of salary/pension on account of inflation.
The next issue of AICPI-IW for the month of July 2023 will be released on 31st August 2023.