Amid the festive season, the Centre is gearing up to make a significant announcement regarding the revised Dearness Allowance (DA) and Dearness Relief (DR) for pensioners and central government employees under the 7th Pay Commission.
Though no official statement has been issued yet, there are speculations that the long-awaited announcement might come to light on Wednesday, October 18.
Media reports suggest that the central government is considering a 4% DA hike, potentially increasing the current 42% to 46%. The final decision will, however, be made by the government and subject to cabinet approval.
The
increase in dearness allowance is poised to take effect from July 1, 2023, with the DA rate being determined by the All India Consumer Price Index (AICPI) from January to June.
Let's break down the salary calculations based on the minimum and maximum basic salaries:
For those with a minimum basic salary of Rs 18,000, the current DA at 42% provides a monthly increase of Rs 7,560. With the new DA rate at 46%, this monthly increase will reportedly rise to Rs 8,280. Therefore, employees with this basic salary can anticipate an annual salary increase of Rs 8,640.
For individuals with a maximum basic salary of Rs 56,900, the current DA at 42% adds Rs 23,898 to their monthly earnings. Following the DA hike to 46%, this monthly increase will reportedly escalate to Rs 26,174. Consequently, those with this higher basic salary can look forward to a substantial annual salary increase of Rs 27,312.
What are DA and DR?
Dearness Allowance (DA) is a cost-of-living adjustment allowance provided by the government to public sector employees and pensioners.
Dearness Relief (DR) is similar in nature and benefits central government pensioners.
Why does the government revise DA/DR?
The government routinely revises the DA/DR rate every six months to counteract the diminishing purchasing power of monthly salary and pension wealth caused by inflation.
How is DA calculated?
DA is calculated as a percentage of the basic salary. The formula for central government employees is as follows:
Dearness Allowance percent = ((Average of AICPI (Base Year 2001=100) for the past 12 months - 115.76) / 115.76) * 100
(Edited by : Amrita)
First Published: Oct 12, 2023 10:48 AM IST
