Central government employees and pensioners are eagerly awaiting news on the dearness allowance (DA) and dearness relief (DR) hike linked to the 7th Pay Commission. With over 1 crore employees and retirees affected, the announcement is crucial, as the DA hike is due from July 1. If confirmed this month, employees and pensioners will receive three months’ arrears alongside their revised salaries and pensions.
Media reports suggest a potential announcement could come on Wednesday, October 9, during a Union Cabinet meeting. However, sources indicate that the long-awaited announcement may be delayed until just before Diwali, which falls on November 1 this year. Historically, DA hikes have often been announced around the festive season.
Understanding DA and Its Importance
Dearness Allowance (DA) is a percentage of an employee’s basic salary, designed to mitigate the effects of inflation. Adjustments are typically made every six months, providing government employees relief from rising living costs. DA hikes are calculated based on the average All India Consumer Price Index (CPI-IW) for industrial workers, typically revised on January 1 and July 1 each year.
DA Calculation Formula
The DA for central government employees is determined using the formula:
DA% = [(Average of AICPI (Base Year 2001 = 100) for the last 12 months – 115.76) / 115.76] x 100.
Potential DA Hike from July to October
Earlier this year, the DA was increased by 4% from January 2024, raising it from 46% to 50%. Another hike is anticipated for July 2024, with projections based on recent AICPI data suggesting it could rise to 53.36%. If the Modi government opts for a 3% increase, the DA could reach 53%, imposing an estimated burden of around Rs 13,000 crore on the government exchequer. This adjustment is expected to enhance the standard of living for employees significantly.
As the date approaches, both current employees and pensioners remain hopeful for positive news regarding the DA hike, which would provide much-needed financial relief during these inflationary times.
