DA Hike 7th Pay Commission: At a time when the inflation rate India Consistently above the Reserve Bank of India’s comfort zone of 2-6 per cent, the central government can give relief to its employees and pensioners. CPI Inflation has already touched an eight-year high, and prices of various commodities are rising. The government may make another announcement to compensate for the effects of inflation. DA hike For Central Government employees under 7th Pay Commission.
According to a report by Zee News, the government may consider increasing the DA by 5 percent in July. This means that if the report is to be believed, then the central government employees will get 39 percent DA. Presently government employees get 34 per cent DA on their basic pay. If the DA hike of 5 per cent is implemented, they are going to get 39 per cent dearness allowance on top of their basic pay. Dearness Allowance (DA) is given to government employees, while Dearness Relief (DR) is for pensioners.
The DA has been revised based on changes in the All India Consumer Price Index (AICPI). Now, as the AICPI is highly prevalent, the chances of increase in dearness allowance to government employees are also high. Retail inflation stood at 7.04 per cent in May, well above the RBI’s target of 2-6 per cent.
April AICPI has fueled rumors that the government may consider a 5 per cent hike in DA in July.
The Central Government had withdrawn three installments of DA and DR for January 1, 2020, July 1, 2020 and January 1, 2021, in view of the unprecedented situation arising out of the COVID-19 pandemic. Finance Minister Nirmala Sitharaman has said that withholding of DA and DR in a written reply to a question in Rajya Sabha in August last year resulted in a savings of about Rs 34,402 crore.
DA Hike: Calculation Formula
Dearness Allowance Percentage = ((Average of All India Consumer Price Index (Base Year 2001=100) for the last 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 last 3 months-126.33)/126.33)x100.
How much DA is going to increase?
According to the notice of the Department of Expenditure, if the basic pay of an employee is Rs 18,000, he will get dearness allowance of Rs 6,120 after the latest hike implemented in April. Earlier, the employee was getting Rs 5,580 DA at the rate of 31 per cent DA. This would mean that there has been an increase of Rs 540 after the latest DA hike. If the DA is increased by another 5 per cent, i.e. if the employee gets 39 per cent DA on the basic salary of Rs 18,000, then the DA will be Rs 7,020. This means that if 5 per cent hike in DA is implemented, the salary will increase by Rs 900.
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