7th Pay Commission: Though the retail inflation in March 2023 eased to 5.66 per cent to come under the RBI’s upper tolerance limit of 6 per cent, it is still far from the RBI’s target number of 4 per cent. As it is making things costlier, central government employees’ dearness allowance or DA is likely to be hiked by 3-4 per cent soon for the period starting from July 1, 2023, according to media reports. The DA is provided to employees and pensioners to compensate them for rising prices.
The last revision in DA was done last month by 4 per cent, which became effective from January 1, 2023. After the 4 per cent hike, the DA of central government employees increased to 42 per cent. Before this, the DA was hiked in September 2022 by 4 per cent, which became effective from July 2022.
Now, for the 7th Pay Commission, the DA is expected to hike by another 3-4 per cent, to be effective from July, according to the reports. Currently, as per the latest data, there are 47.58 lakh central government employees and 69.76 lakh pensioners.
DA and DR are revised twice a year — January and July. Dearness allowance is given to government employees, while the dearness relief is for pensioners. The DA is given to employees based on the basic pay of the employees, while the DR is given on the basis of basic pension.
On What Basis Does Govt Hike DA?
The central government revises the DA and DR for employees based on a formula. Following is the formula:
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.
Jharkhand Raises DA For State Govt Employees
The Jharkhand government on Thursday increased the dearness allowance for its employees to 42 per cent from 34 per cent. The decision to hike the DA rate was taken in the state cabinet meeting, chaired by Chief Minister Hemant Soren.
The DA hike is in line with the accepted formula based on the recommendations of the 7th Central Pay Commission.