7th Pay Commission DA Hike: What's the Expected Salary Boost for Central Govt Employees?

The central government employees are expected to get a good news from the Centre soon over the hike in their dearness allowance.

If the reports are to be believed, the government is likely to give a 3 per cent hike in dearness allowance even as the inflation is coming under control. This increase is expected to come into effect from July 1.

According to a PTI report, the government is likely to increase the dearness allowance (DA) by three percentage points to 45 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.

So, how much this will translate into hike for the employees?
If an employee currently receives a monthly salary of Rs 50,000 with a basic pay of Rs 15,000, they are entitled to receive Rs 6,300, which corresponds to 42 per cent of their basic pay. Following an expected 3 per cent salary increase, the employee's monthly income will rise to Rs 6,750, an increase of Rs 450 per month.

The Centre had increased DA by four percentage points to 42 per cent based on the percentage increase in the 12 monthly average of the All India Consumer Price Index for the period ending December 2022.

The DA is provided to employees and pensioners to compensate them for rising prices.

The cost of living increases over a period of time and is reflected through CPI-IW. The allowance is revised periodically twice a year.

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

The last revision in DA was done on March 24, 2023, and was effective from January 1, 2023.