7th Pay Commission: The Modi government is likely to announce a hike in dearness allowance (DA) and fitment factor this month, according to media reports. According to the reports, the minimum salary of government employees is expected to see a rise from Rs 18,000 to Rs 26,000 after the hike in fitment factor. The government is expected to revise the fitment factor and dearness allowance (DA) by March 20.
The finance ministry official, on the condition of anonymity, told India.com that the central government employees could expect a 4 per cent hike in Dearness Allowance this time. Moreover, Dearness Relief could also see a 4% hike for retired employees, he said, adding that if the Dearness Allowance is hiked, it will be effective from January 1, 2023.
Read More: Want to apply for NRI PAN card? Follow these steps
Dearness allowance calculation:
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.
It is important to note that if DA is hiked to 42 per cent from 38 per cent, then employees’ dearness allowance on their salary will also jump. Notably, DA is different depending upon the level of the pay matrix of an employee.
Read More: PM Kisan Samman Nidhi Yojana To PM Fasal Bima Yojana: List Of Schemes Announced For Farmers
For example:
Level 1 grade pay:
If the basic salary under level 1 of the 1800 grade pay scale for employees, is 15,000 per month.
With DA at 42%, the dearness allowance would come at 6300 on the mentioned salary (42% of 15,000 pm). At 38%, the dearness allowance comes around to 5700 (38% of 15,000 pm).
Here are some of the key details:
- The DA hike will be effective from January 1, 2023.
- Presently over one crore central government employees and pensioners are getting 38 per cent dearness allowance.
- The last revision in DA was done on September 28, 2022, which was effective from July 1, 2022
- The Centre had increased DA by four percentage points to 38 per cent based on the percentage increase in 12 monthly average of All India Consumer Price Index for the period ending June, 2022.
- The DA is provided to employees and pensioners to compensate them for rising prices.
- The cost of living increases over a period of time and is reflected through CPI-IW.
