7th Pay Commission latest update: How to calculate DA after 5 per cent increase

New Delhi, Aug 21: As Central Government employees await good news on a DA hike and 7th Pay Commission, here is what they can expect.

While the CG employees expected that the hike would be rolled out in August, it is now almost certain that the same would be announced in September 2019 only.

There would be a hike of 5 per cent in the Dearness Allowance. According to analysts and officials there is a good chance that the DA would be hiked by another 5 per cent. The Government is planning on hiking the DA once the AICPI figures are made available.

What CG employees must bear in mind is that the Dearness Allowance may be increased by 5 per cent. This could be the good news that may be on the way as a result of which the government did not take into account the demand for a hike in the basic minimum pay.

The Centre it may be recalled had indicated that CG employees would an increase in their DA from July 1 2019. The hike is expected to be around 5 per cent for the period between July 1 2019 and December 2019. Currently the DA is at 12 per cent and once the increase is rolled out, then it would stand at 17 per cent.

DA percentage for CG employees: Average of the All India Consumer Price Index (Base year-2001=100) for last 12 months-115.76/ 115.76 x 100.

DA percentage for Central Public Sector employees: Average of the All India Consumer Price Index (Base year-2001=100) for last 3 months-126.33/ 126.33 x 100.

There is a possibility that the DA may be increased by 5 per cent. There is a tangible reason behind it and that is because, according to the Consumer Price Index (CPI) data, inflation has increased in April, 2019. However, there is a little uncertainty as CPI statistics for June, 2019 are yet to come and this will be revealed by the end of July.

This would mean that the DA would stand at 17 per cent. This would incidentally be the highest DA increment since 2016. The government had hiked the DA by 3 per cent in January 2019. At that time the AICPI stood at 301 and the DA at 10.36 per cent. If the index increases by 2 points then the DA calculation will be based on 17 per cent.

Since the implementation of the 7th Pay Commission, the DA at each level increases in a uniformed manner. According to the pay matrix, the DA allowance from Level 1 to Level 18 will be in equal proportion to their wages. Level 1 is the entry level, while Level 18 is that of an official in the Cabinet rank.