7th Pay Commission DA Hike: After increasing the Dearness Allowance (DA) for central government employees by 4% in January 2023, the government may increase DA again in July this year.
The government reviews DA and Dearness Relief (DR) after 2 years. DA has increased according to inflation figures. The government hikes dearness allowance twice a year in January and July. The formula made by the government to increase DA has also been revised. The Labor Ministry has recently amended the DA formula for calculating Dearness Allowance (DA).
Government changed the base year
Ministry of Labor has released a new series of Wage Rate Index (WRI). It is called WRI- Wage Rate Index. According to the ministry, the base year of the new WRI series is 2016 = 100. Whereas, the base year in the old series was 1963–65.
Now DA is calculated like this
The Central Government has revised a special formula for revision of Dearness Allowance (DA) and Dearness Relief (DR) for its employees. Now this is the new formula.
For calculation of DA percentage: ((Average of AICPI for last 12 months (Base 2001=100) -115.76)/115.76)x100
The formula is slightly different for Central Public Sector employees: ((Average of AICPI for last 3 months (Base 2001=100) -126.33)/126.33)x100
Enhanced Take Home Salary
The salary and pension of about 47.58 lakh central government employees and 69.76 lakh pensioners will get a hike after the recent 4% hike in Dearness Allowance (DA) and Dearness Relief (DR). DA is based on the basic salary of the employee. Increase in DA increases your take home salary.
Salary will increase so much
For example, an employee with a monthly salary of around Rs 42,000 and a basic pay of around Rs 25,500 would have received Rs 9,690 as DA before the recent 4% hike. With the new DA hike, this amount will increase to Rs 10,710. That is, there will be an increase of Rs 1,020 in take home salary.
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