7th Pay Commission: Central Government Employees to Get Second DA Hike By Sept – How Much Salary Increase?

7th Pay Commission News: Central government employees awaiting the dearness allowance (DA) hike for July-September are set to receive positive news soon. The Narendra Modi government is expected to announce the next DA increase in the first week of September, according to reports.

The most recent DA hike of 4% was announced in March this year but was retroactively implemented from January 2024, raising the DA to 50% of the basic salary. Following this, there were speculations that the government might merge the DA into the basic pay and reset the DA to 0%. However, the government has clarified that this is not under consideration.

Addressing these speculations, a senior finance ministry official explained that the 5th Pay Commission had recommended merging DA into the basic pay whenever the consumer price index increased by 50% over the base index. This was done in February 2004 when DA at 50% was merged into the basic pay. However, the 6th Pay Commission later advised against merging DA with the basic salary, even if it exceeded the 50% mark.

What DA Increase Can Employees and Pensioners Expect in September?

It is anticipated that government employees and pensioners could see a DA increase of at least 3% in September. DA for employees and dearness relief (DR) for pensioners are calculated based on the All India Consumer Price Index (AICPI), which measures changes in retail prices across various sectors.

How is DA Calculated for Central Government Employees?

DA% = [(Average AICPI for the last 12 months - 115.76)/115.76] x 100

DA Calculation for Public Sector Employees:

DA% = [(Average AICPI for the last 3 months - 126.33)/126.33] x 100

Here, AICPI refers to the All-India Consumer Price Index.

Salary Adjustments Post-DA Hike

- Pre-Merger Salary: Base salary of ₹18,000 with a 50% DA of ₹9,000.
- Post-Merger Salary: New basic salary of ₹27,000 with a 4% DA of ₹1,080, totaling ₹28,080.
- The merger led to a significant increase of ₹9,000 in the basic salary component.

Expected Implementation of DA Hike

- Experts predict a 3% DA increase starting in the first week of September 2024.
- The exact AICPI IW numbers are pending.
- Government officials suggest a 3% DA increase due to current inflation trends.