7th Pay Commission: CG employees to soon get hike in DA as new CPI-IW is finalised

New Delhi, July 18: Following the implementation of the 7th Pay Commission, government employees and pensioners can expect a salary increase. This is because the government is planning on modifying the index and base year for calculating dearness allowance.

It may be recalled that the CG employees had got a hike by 2 per cent in the DA. Reports indicate that the labour ministry is working on a new series of consumer price index for industrial workers, which is used to determine dearness allowance (DA).

The ministry has finalised the new CPI-IW with base year 2016 and it is proposed that the base be revised every six years to capture the changes in living expenses more quickly, a ET report said while quoting an official.

The last revision in the base year was in 2006 by the 6th Pay Commission to 2001 from 1982. Once these changes come into affect it would be seen as a relief for CG employees who have been awaiting news on the 7th Pay Commission.

After the new revision several new items such as cars and mobiles are being added to the list to reflect the change in lifestyle of industrial workers over the last one and half decades.

"The trend so far is that the weightage of transport, healthcare and housing has gone up many fold in the new series in the monthly expenditure of an industrial worker, especially consumption of petrol and diesel with the addition of cars to it, while there is decline in overall food basket which is being diversified," the person said. With increase in fuel prices, cost of healthcare and housing, it is expected that there will be some increase in new index, the report also said.

It may be recalled that based on the recommendations of the 7th Pay Commission the government had increased the DA from 5 to 7 per cent. This move had benefited nearly 50 lakh Central Government employees. The effect on the exchequer on account of the rise in DA and dearness relief is around Rs 6,000 crore per annum.