Let us take the example of a central government employee who gets a basic salary of Rs 53,500 per month. At 46% his dearness allowance was Rs 24,610. Now, if DA increases to 50%, their DA will increase to Rs 26,750.
There is good news for central employees. Their dearness allowance will increase by 4 percent. According to the information received, another increase in the Dearness Allowance (DA) of central government employees will be made soon. Let us tell you that the Central Government usually revises the dearness allowance twice a year in January and July. DA hike is usually announced in March. In such a situation, the government may soon announce an increase in DA.
How much will be the increase in dearness allowance this time?
Dearness Allowance for Central Government employees is calculated on the basis of the latest Consumer Price Index for Industrial Workers (CPI-IW). The Labor Bureau, a branch of the Labor Ministry, publishes CPI-IW data every month. There is a formula to calculate dearness allowance of central government employees and pensioners. The formula is: 7th CPC DA% = [{12 month average of AICPI-IW (base year 2001=100) for the last 12 months – 261.42}/261.42×100]
Keep in mind that this formula will be applicable to those central government employees and pensioners who get salaries based on the recommendations of the Seventh Pay Commission.
DA%= (392.83-261.42)/261.42×100 = 50.26
The average CPI-IW for the last 12 months is 392.83. According to the formula, DA is 50.26 percent of the basic salary. Therefore, the Central Government may increase the Dearness Allowance by up to 50% (ignoring decimal points).
At present, central government employees and pensioners get 46% Dearness Allowance and Dearness Relief (DR) respectively. The central government had last announced the DA hike on October 18, 2023. It was effective from July 1, 20. So now, there is a possibility of an increase of 4% in DA and DR for central government employees and pensioners. This increase will be effective from January 1, 2024.
How much will the salary of central government employees increase due to 4% DA increase?
For central government employees, the increase in DA increases their take-home salary. Let us take the example of a central government employee who gets a basic salary of Rs 53,500 per month. At 46% his dearness allowance was Rs 24,610. Now, if DA increases to 50%, their DA will increase to Rs 26,750. If DA increases by 4% in the upcoming round, his salary will increase by Rs 26,750 – 24,610 = Rs 2,140.
How much will pensioners’ salaries increase?
Let us assume that a central government pensioner gets a pension of Rs 41,100 per month. At 46% DR the pensioner gets Rs 18,906. If his DR is increased to 50%, he will get Rs 20,550 every month as dearness relief. In such a situation, if DA is increased by 4% soon, then their pension will increase by Rs 1,644 per month.
When can the increase in DA be announced?
Looking at earlier precedents, the central government may announce a DA hike soon. The DA hike, which was effective from January 1, 2023, was announced on March 24, 2023. The DA hike, which was effective from July 1, 2023, was announced on October 18, 2023.
