7th Pay Commission: Is A 3% Hike In DA For Central Government Employees Expected On This Date?

In a significant update concerning the 7th Pay Commission, reports indicate that the Central government is likely to announce a second hike in Dearness Allowance (DA) and Dearness Relief (DR) for employees and pensioners in the first week of September. According to Financial Express, the hike is expected to be 3% for both DA and DR this time around.

DA is provided to active government employees, while DR is given to pensioners.

The government typically raises Dearness Allowance and Dearness Relief twice a year, with announcements made in March and September. These hikes are implemented retrospectively, effective from January and July each year.

In January of this year, DA was increased by 4%, bringing it to 50% of the basic pay. This milestone also triggered corresponding hikes in other allowances, which rose by up to 25%.

For the July-December period of 2024, a 3% increase in DA is anticipated. Overall, a similar 3% hike is expected for government employees' dearness allowance and pensioners' dearness relief.

The DA increase is calculated based on the All India Consumer Price Index (AICPI), which tracks changes in retail prices across various sectors.

Previously, the DA calculation was based on the consumer price index with the base year 2001. However, from September 2020 onwards, a new consumer price index with the base year 2016 has been used for DA calculations.

On August 2, it was reported that the Central government plans to increase DA by 3% in September, with the hike being effective from July 1, 2024.