DA hike likely for Central government employees, check how much salary will increase after hike in…

7th Pay Commission: The Central Government is likely to announce a 3-4 percent DA hike for central government employees in October. The announcement may be made before Diwali.

7th Pay Commission: The month of October is very crucial for Central Government employees, as they are eagerly awaiting their DA hike that will raise their salaries. There is no official update on the DA hike announcement so far; however, the DA for central government employees was increased in the first week of October. The central government is expected to increase the DA by three to four percent before Diwali, most probably in October. It is worth noting that the basic salary of the entry-level central government employee, which is around Rs 18,000 per month, will be increased in the range of Rs 540-720 per month after the DA hike announcement. The increased salary will get effective from July 1, 2024, News18 reported citing sources.

7th Pay Commission DA Hike: Expected Salary Hike

If an employee who is currently making a monthly salary of Rs 30,000 and his basic pay is Rs 18,000. He also receive a dearness allowance (DA) of Rs 9,000, which is reflective of half their basic pay. Now, envision a projected 3% increase. That would bring his DA up to Rs 9,540, offering him an extra Rs 540. Now, let’s play around with the figures a bit more and posit a 4% DA increase. This would result in a revised DA of Rs 9,720 per month. Hence, an employee taking home around Rs 30,000 per month with a basic pay of Rs 18,000 can stand to enhance their salaries by an additional Rs 540 to Rs 720 a month.

7th Pay Commission DA Hike: What Is Dearness Allowance?

Dearness Allowance, commonly known as DA, is offered to those working for the government, while Dearness Relief, or DR, is dedicated to those in retirement. The rates for both DA and DR are revisited and adjusted twice a year, in the months of January and July. Currently, a hefty crowd of over a million central government staff and those enjoying their golden years are beneficiaries of a 50 percent dearness allowance.

The government didn’t shy from showcasing their generosity in March 2024, as they upped both the dearness allowance and the dearness relief by 4 percent. This meant a jump to 50 percent of the basic salary for government employees, marking a considerably noteworthy development.

7th Pay Commission DA Hike: How Govt Decide The DA Hike?

The Dearness Allowance (DA) and Dearness Relief (DR), crucial components of pay structure, are determined by how much the All India Consumer Price Index (AICPI) averages over a span of 12 months ending in June 2022. While we usually expect tweaks in these allowances twice a year – starting from January and July, the official pronouncements, however, often happen around March and September.

In an interesting move in 2006, the government revised the means of figuring out DA and DR for its staff and pensioners.

Here’s the straightforward precept they use to work out the Dearness Allowance Percentage:

Let’s take the 12-month average of the All-India Consumer Price Index (using the base year of 2001 which equates to a score of 100) subtract it from 115.76, then divide the result by 115.76 and multiply by 100.

Nevertheless, for employees serving in the central public sector, the calculation tweaks slightly:

They use the last 3-month average of the All-India Consumer Price Index (base year 2001 equals 100), subtract it from 126.33, then divide the outcome by 126.33 and finally multiply by 100.

8th Pay Commission Latest Update

While it’s a usual practice to establish a pay commission every ten years, it isn’t necessitated legally to specifically form one in the same time frame.

The seventh Pay Commission, which started its journey back in February 2014, is clocking its decade soon. However, the commission’s recommendations didn’t kick off until January 1, 2016. Therefore, by the end of the upcoming year, it will hit the ten-year milestone, marking a decade since its implementation.

8th Pay Commission: How Much Salary Will Increase?

There are indications that central government employees might be in for a pay rise. If the proposed changes come into effect utilizing a fitment factor of 1.92, the base salary could jump up from its current rate of Rs 18,000 to a more comfortable figure of Rs 34,560. In the same vein, pensioners might also see an increase in their minimum pension to a promising amount of Rs 17,280.