The Central government generally revises the DA/DR rate every six months to counteract the diminishing purchasing power of monthly salary and pension wealth caused by inflation.
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7th Pay Commission news: The Modi government is expected to announce the hike in the Dearness Allowance (DA) soon for its employees and the dearness relief for pensioners under the 7th Pay Commission. According to the reports, the Centre is likely to make the announcement before the festivities around Diwali. Rumours suggest that the Centre may raise Dearness Allowance by 4% as several government employees and pensioners wait for a declaration on the increase.
The DA hike announcement was initially set prior to Dusshera, however, current sources indicate that the government may make the announcement before the festivities around Diwali. Both 68 lakh pensioners and 47 lakh employees are set to gain from the announcement.
The government employees must note that the centre may announce 4 percent DA hike, as per reports. The current DA rate of 42% would become 46% if the government chose to increase it by that much.
This increase would take effect on July 1, 2023, and would result in higher earnings for the month of November as well as back pay for the months of July through October.
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When and Why Centre Revises DA/DR?
The Central government generally revises the DA/DR rate every six months to counteract the diminishing purchasing power of monthly salary and pension wealth caused by inflation.
Check How DA is Calculated
The basic formula to increase DA is based on the latest Consumer Price Index for Industrial Workers (CPI-IW). Notably, the DA is given to government employees, while DR is given to pensioners.
The DA and DR are hiked twice a year — January and July. Right now, over one crore central government employees and pensioners are getting a 42 per cent dearness allowance.
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When last time DA was hiked in March 2023, it was increased by 4 per cent to 42 per cent. Given the current inflation rate, the next DA hike is expected to be 3 per cent this season.
