Central Government employee His salary is expected to increase next month as there is a possibility of a pay hike by the Center dearness allowance (DA) 3 per cent, according to media reports. DA is expected to increase inflation Stays high for a few months. DA is revised twice a year – January and July.
As in All. DA is revised based on changes in India Consumer Price Index (AICPI), dearness allowance to government employees is likely to increase. This is because retail inflation in India stood at 7.01 per cent during June, which is well above the RBI’s comfort level of 2-6 per cent.
In March, the central government had approved a 3 per cent hike in Dearness Allowance (DA) under the Seventh Pay Commission, thus reducing the DA to 34 per cent of basic income. More than 50 lakh government employees and 65 lakh pensioners are getting benefits from this move.
“The Union Cabinet, chaired by the Prime Minister Narendra Modi, has approved the release of an additional installment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners with effect from January 1, 2022, subject to an increase of Rs. represents. 3 per cent over and above the existing rate of 31 per cent of basic pay/pension to compensate for the price hike,” the Prime Minister’s Office had said in a statement.
After the hike of another three per cent, the DA will increase to 37 per cent. Dearness allowance is given to government employees, while dearness relief is given to pensioners.
Apart from this, employees can also get payment of DA arrears for 18 months. According to recent media reports, the issue of payment of DA arrears of 18 months from January 2020 to June 2021 may be addressed soon and central government employees may also get arrears of Rs 2 lakh in one go.
How does the government calculate DA under 7th Pay Commission?
The Central Government had in 2006 revised the formula for calculation of DA and Dearness Relief (DR) for Central Government employees and pensioners.
Dearness Allowance (DA) is an amount given to government employees and pensioners to compensate for the rising inflation in the country. Since the rate of inflation varies by location across the country, dearness allowance is calculated accordingly. These places can be broadly classified into urban, semi-urban and rural areas. The amount of DA dues is decided by the pay band and composition of the employees.
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.
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