7th Pay Commission: Central government employees may soon get a new year gift from the Centre in form of DA hike. Reports suggest that the first round of Dearness Allowance (DA) hike of this year will be announced in early March and it will be better than what the employees and pensioners received last year in the same month.
Central government employees and pensioners were given 3 percent DA hike in January 2022 and the second hike was given 4 percent, effective July 2022. After the second hike, the DA stands at 38 percent. Reports say that the first DA hike of 2023 will match the figure of last hike announced around Diwali 2022.
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Dearness allowance (DA) and dearness relief (DR) are revised twice a year, effective January 1 and July 1 every year. DA and DR increase benefits approximately 48 lakh central government employees and 68 lakh pensioners. Going by the trends in recent years, the Centre will most probably announce the January DA hike in March, probably before Holi festival.
DA is the cost-of-living adjustment allowance paid by the government to the employees and pensioners of the public sector. Its calculation is done as a percentage of the basic salary of government employees.
After the Centre announced DA hike for its employees around Diwali last year, many states like Uttar Pradesh, Haryana, Punjab, Delhi, Chhattisgarh, Assam, Rajasthan, Jharkhand and Odisha have raised dearness allowance of their employees since then.
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How to calculate Dearness Allowance:
For central government employees:
The DA is calculated as {(Average of the All-India Consumer Price Index (Base year -2001 =100) for the last 12 months -115.76)/115.76} x 100.
For central public sector employees:
The DA is calculated as {(Average of the All-India Consumer Price Index (Base year -2001 =100) for the last 3 months -126.33)/126.33} x 100
