DA Hike Update – Big news for central government employees. Around 1 crore central employees and pensioners are eagerly waiting for a salary hike. The DA (dearness allowance) and DR (dearness relief) hike (which is announced twice a year – in July and December) is expected to be announced. This will also be the last DA and DR hike for around 33 lakh central government employees and 66 lakh pensioners under the 7th Pay Commission. The recommendations of the 7th Pay Commission were implemented from January 2016 and are set to expire in December this year.
When can the announcement be made?
Let us tell you that this DA hike usually comes into effect from July, but it is announced late and is usually credited to the accounts of central government employees and pensioners around October coinciding with the festive season in the country. So, will government employees be able to celebrate a substantial hike in salary around October? What kind of DA hike should they expect this time? Let’s know the analyst’s opinion.
What was the last hike in DA announced by the government?
In March this year, the government announced a 2% hike in the dearness allowance given to central government employees and pensioners, effective from January 2025, making it 55% of their basic pay. Prior to this hike, the DA was 53% of the basic pay. DA is an important factor in the salary of government employees, as it helps them mitigate the impact of inflation on their income.
The DA hike is calculated based on the Consumer Price Index for Industrial Workers (CPI-IW), which is released monthly by the Labour Bureau under the Labour Ministry. The bureau shares these index values every month that track the relative changes in retail prices of a certain category of goods and services consumed by industrial workers over a given time period.
Calculation of dearness allowance for employees
7th Pay Commission DA% = [{12-month average of AICPI-IW (base year 2001) for last 12 months – 261.42}/261.42×100]