Govt Employee Salary Likely To Rise As Dearness Allowance May Be Hiked By 4%

7th Pay Commission: The government employees may soon get a salary hike as their dearness allowance (DA) is expected to be increased by 4 per cent. As per the All-India Consumer Price Index (Industrial Workers)’s data for the month of May, a possible rise in the DA is seems to be on cards. The DA of government employees is revised twice a year — in January and July.Also Read – 7th Pay Commission Latest News: Pensioners Write to PM Modi to Release 18-month DA Arrears. Here’s What They Say

DA is revised on the parameters of  All India Consumer Price Index (AICPI). Currently, as AICPI is prevailing high above the Reserve Bank of India’s tolerance level, the possibility of government employees getting aa hike in DA is also high. The retail inflation in June stood at 7.01 per cent, which is above the RBI’s target level of 2-6 per cent. Also Read – 7th Pay Commission Latest News: Will Govt Employees Get DA Arrears of 18 Months? Centre to Take up Matter Soon

The DA of the employees is likely to be hiked by 4 per cent, according to the latest media reports. If this happens, then the DA of government employees would reach 38 per cent. Also Read – 7th Pay Commission: Govt Employees Likely to Get DA Hike in August. Check How Much Salary Will Increase

The Union Cabinet had approved to 3 per cent hike in DA in March under the 7th Pay Commission, thus taking it to 34 per cent of the basic income. Over 50 lakh government employees and 65 lakh pensioners are getting profit from this move.

As per latest media reports, Central government may soon also address the issue of DA arrears  and government employees may also receive Rs 2 lakh in pending arrears in one go. The amount of DA arrears is decided by the employees’ pay band and structure.

The Centre had held back three instalments of DA and DR for January 1, 2020; July 1, 2020; and January 1, 2021, due to the unprecedented circumstances which arose due to the COVID-19 pandemic. In a reply to a query in the Rajya Sabha in August 2021, Finance Minister Nirmala Sitharaman said the holding back of DA and DR saved about Rs 34,402 crore for the government.

How is DA under 7th Pay Commission Calculated?

The central government had revised the formula to calculate the DA and DR for central government employees and pensioners in 2006. As per the formula. DA is calculated as:

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.