7th Pay Commission: When Can You Expect Next Dearness Allowance (DA) Hike?

Over one crore central government employees are eagerly looking forward to the next dearness allowance (DA) hike.

The Centre is expected to make a formal announcement in this regard soon. Although there is no official confirmation, it is speculated that the decision is expected to be out in the month of September.

How Much Can Govt Employees Expect DA Hike?
Going by a PTI report, the government is likely to increase the dearness allowance (DA) for its over one crore employees and pensioners by three percentage points to 45 per cent from the existing 42 per cent as per the agreed formula for the purpose.

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 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.

Additionally, he elaborated that the Finance Ministry's expenditure department will create a proposal outlining the increase in Dearness Allowance (DA) along with its financial impact. This proposal will then be presented to the Union Cabinet for approval.

The DA hike will be effective from July 1, 2023.

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

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.