7th Pay Commission: Big Decision To Be Taken On Dearness Allowance (DA) Hike On Wednesday

For over a month, there have been rumours of the central government employees getting dearness allowance (DA) hike. However, finally, there seems to be some update.

Yes, the Union Cabinet is having a meeting on Wednesday to approve the DA hike tomorrow, India Today reported citing sources.

As per the earlier reports, the dearness allowance was supposed to be announced by now and it was speculated that the Centre would approve 3 per cent hike. However, the latest buzz is that the government is likely to increase the dearness allowance (DA) by four percentage points to 46 per cent from the existing 42 per cent as per the agreed formula for the purpose.

"The CPI-IW for June 2023 was released on July 31, 2023. We are demanding a four percentage point hike in dearness allowance. But the dearness allowance hike works out to be a little over three percentage points. The government does not factor in hiking DA beyond the decimal point. Thus DA is likely to be increased by three percentage points to 45 per cent," PTI quoted All India Railwaymen Federation General Secretary Shiva Gopal Mishra as saying.

The DA is given to employees and pensioners to offset the impact of inflation. Inflation leads to a rise in the cost of living, and this is measured by the Consumer Price Index for Industrial Workers (CPI-IW). The allowance is updated twice a year to account for these changes.

The calculation of dearness allowance for both employees and pensioners is based on the most recent Consumer Price Index for Industrial Workers (CPI-IW), which is released monthly by the Labour Bureau.

The last update to DA occurred on March 24, 2023, and it became effective from January 1, 2023.