7th Pay Commission: Central Govt Likely To Hike DA By 4% Soon, Say Reports

7th Pay Commission: After several states recently hiked their dearness allowances (DA) for state government employees, the central government is also likely to raise DA for its employees by 4 per cent, according to reports. After the 4 per cent hike, the DA will now increase to 46 per cent.

The DA is hiked twice a year — January and July. The last hike was announced in March 2023, which became effective from January 1, 2023. In the hike, the DA was raised by 4 per cent to 42 per cent.

Now, according to the latest reports, the central government might decide to hike DA by 4 per cent, following which the DA will increase to 46 per cent. The next DA hike is likely to be announced in September or October, said the reports.

Dearness allowance (DA) is given to government employees, while dearness relief (DR) is for pensioners. According to the official data, there are 47.58 lakh central government employees and 69.76 lakh pensioners. After the upcoming DA hike, these employees and pensioners will be benefitted.

Recently, Madhya Pradesh increased DA for its employees by 4 per cent. Before that, the Odisha government also announced a four per cent hike in dearness allowance for its employees and pensioners. The DA for employees and pensioners has been increased to 42 per cent from the existing 38 per cent. The increased DA will be applicable with retrospective effect from January 23 this year and the employees will receive the amount with their June salary.

Before that, Karnataka also hiked DA by 4 per cent with a retrospective effect from January 1, 2023. The DA in Karnataka has been increased from 31 per cent to 35 per cent. Jharkhand and Himachal Pradesh have also announced their salary hikes for their government employees and pensioners.

How Is DA Hike Calculated?

The central government revises the DA and DR for employees based on a formula. Following is the formula:

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.