New Delhi: Government employees are awaiting the decision of the Centre on the dearness allowance, which is expected to raise their pay. The DA is updated twice per year, in January and July. The government’s decision on DA, which was supposed to be made public at the end of July, has yet to be made public. According to media reports, the dearness allowance is expected to rise by 4% this time to offset the impact of inflation.
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Retail inflation-industrial workers are used to revise DA and DR. After remaining high for several months, retail inflation for industrial workers stood at 6.16 percent in June 2022, down from 6.97 percent in May 2022 but higher than 5.57 percent in June 2021, owing to lower food and fuel prices. The all-India CPI-IW (consumer price index for industrial workers) increased by 0.2 points to 129.2 points in June 2022. In May, the CPI-IW was 129 points.
Dearness allowance (DA) is paid to government employees, whereas dearness relief (DR) is paid to retirees.
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According to reports, if the DA is increased by 4 percentage points, it will reach 38%. The DA for central government employees under the 7th Pay Commission was revised upwards to 34% in January, from 31% previously.
Previously, in July 2021, the Centre raised the DA and DR for central government employees and pensioners, respectively, to 28% from 17% after a long pause. Again in October 2021, central government employees will see a 3% increase in dearness allowance. The dearness allowance for central government employees was then increased to 31%, effective July 20, 2021. Salaried employees will now receive DA and DR at a rate of 34% beginning in January 2022, up from 31%.
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Under the 6th Pay Commission, the government has already increased DA for railway employees while also releasing arrears. The allowance was increased by 14%.
Meanwhile, due to the unprecedented situation caused by the COVID-19 pandemic, the central government withheld three instalments of dearness allowance and dearness relief for January 1, 2020, July 1, 2020, and January 1, 2021. According to recent reports, the central government may also release the arrears held from January 2020 to June 2021.
In 2006, the central government changed the formula for calculating DA for central government employees and pensioners.
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Dearness Allowance% = ((Average of All-India Consumer Price Index (Base Year 2001=100) for the previous 12 months -115.76)/115.76)*100 for central government employees.
Dearness Allowance% = ((Average of All-India Consumer Price Index (Base Year 2001=100) for the previous three months -126.33)/126.33)*100.
