7th Pay Commission: How Govt Calculated 4% DA Hike? Check Details

7th Pay Commission: In a bonanza for 47.58 lakh central government employees, the Central last week hiked the dearness allowance (DA) by 4 per cent for them, thus raising their salaries. The 4% DA hike has become effective from January 2023. Here’s how the government calculated the DA hike:

How is DA Hike Decision Taken?

The DA is provided to employees and pensioners to compensate them for rising prices. The central government revises the DA and DR for employees based on a formula. DA and DR are revised twice a year — January and July. Dearness allowance is given to government employees, while the dearness relief is for pensioners. 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.

The average CPI-IW of the last 12 months is 372.2 currently. Following the formula, DA is coming to 42.37 per cent. So, the Union government increased the dearness allowance to 42 per cent.

How Much Salary Will It Raise?

Let’s say if a government employee’s monthly take-home salary is about Rs 42,000 and the Basic Pay is around Rs 25,500; then he/ she must be getting Rs 9,690 as the dearness allowance. Now, this DA amount will increase to Rs 10,710 after the latest 4 per cent DA hike. So, there will be an increase of Rs 1,020 in monthly take-home salary in this case.

Similarly, the monthly pension will also increase for 69.76 lakh pensioners. For example, if someone gets a basic pension of Rs 30,000 a month, then he used to get Rs 11,400 as dearness relief. Now, the amount will increase to Rs 12,600, thus raising the pension by Rs 800 per month.

Before this, the previous revision in DA was done on September 28, 2022, which was effective from July 1, 2022. The Centre had increased DA by four percentage points to 38 per cent based on the percentage increase in 12 monthly average of All India Consumer Price Index for the period ending June 2022.

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