Recently, various state governments, including Madhya Pradesh, Odisha, Karnataka, Jharkhand and Himachal Pradesh, increased dearness allowance for their state government employees.
7th Pay Commission Update: The Narendra Modi-led Central government is reportedly planning to announce the DA (Dearness Allowance) hike soon for all Central government employees and pensioners. According to the reports, the Centre is likely to announce the DA Hike between Navratri and Diwali, which will be effective from July 1, 2023. To recall, reports had earlier suggested that central employees’ DA will be hiked by 3 percent, the figure could rise further.
Now, according to an Economic Times report, the formula for DA calculation based on the latest Consumer Price Index for Industrial Workers (CPI-IW), a 4 percent hike is expected for the central government employees.
In the last hike in March 2023, the DA was increased by 4 per cent to 42 per cent. Recently, various state governments, including Madhya Pradesh, Odisha, Karnataka, Jharkhand and Himachal Pradesh, increased dearness allowance for their state government employees.
Last month, All India Railwaymen Federation General Secretary Shiva Gopal Mishra told PTI that the Federation is demanding a four percentage point hike in dearness allowance. But, the dearness allowance hike works out to be a little over three percentage points. “DA is likely to be increased by three percentage points to 45 per cent.”
Formula for the Calculation of DA
The Dearness Allowance (DA) and DR hike is decided based on the percentage increase in 12 monthly average of the All India Consumer Price Index (AICPI) for the period ending June 2022. The central government generally revises the allowances on January 1 and July 1 every year and the announcement is being made in March and September.
In 2006, the central government had revised the formula to calculate the DA and DR for central government employees and pensioners.
Dearness Allowance Percentage = ((Average of All-India Consumer Price Index (Base Year 2001=100) for the past 12 months -115.76)/115.76)x100.
For Central public sector employees: Dearness Allowance Percentage = ((Average of All-India Consumer Price Index (Base Year 2001=100) for the past 3 months -126.33)/126.33)x100.