The DA and DR are usually revised twice a year in January and July, based on the retail inflation data. Retail inflation has been high in India off late.
DA Hike 7th Pay Commission: The Indian economy is at the time witnessing a sharp rise in retail inflation, which has recently seen an eight-year high. A rising inflation means a hike in prices, and consequently a burn in the pockets of the citizens of the country. To offset the repercussions of inflation, the government is likely to announce another DA hike for central government employees under the 7th pay commission. The DA and DR are usually revised twice a year in January and July, based on the retail inflation data. As per several media reports, the Centre is likely to implement another DA hike for government employees on July 1, which is next month.
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How Much DA Hike is Expected?
According to a report by Zee News, the government may consider a DA hike of as much as 5 per cent in July. This means central government employees will get a DA of 39 per cent if the report is to be believed. The AICPI in January and February were 125.1 and 125, respectively, while in March it rose to 126. The AICPI in April increased to 127.7, due to the rising inflation. Now, if the AICPI remains to that level, DA hike of 5 per cent is likely. The CPI-based inflation in April stood at an eight-year high of 7.79 per cent.
Currently, government employees get a DA of 34 per cent on their basic salary. If the DA hike of 5 per cent is implemented, they are going to get a 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 government had in March this year revised the DA, which then rose by 3 per cent to stand at 34 per cent of an employee’s basic salary. This was done due to rising prices, and the central government hiked DA by 3 per cent to compensate the inflation rate. The April AICPI has fuelled rumours that the government may consider a DA hike of 5 per cent in July.
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DA Hike 7th Pay Commission: Salary Calculation
Going by the department of expenditure’s notice, if an employee’s basic pay is Rs 18,000, he or she will get a Dearness Allowance of Rs 6,120 after the latest hike that was implemented in April. At the rate of 31 per cent DA earlier, the employee was getting DA of Rs 5,580. This will mean that an increase of Rs 540 has been made after the latest DA hike. If the DA is increased by another 5 per cent, that is, if the employee gets 39 per cent DA on a basic salary of Rs 18,000, the DA will be Rs 7,020. This means that the salary will increase by Rs 900 if the DA hike of 5 per cent is implemented.
