7th Pay Commission : DA Hike:
In a significant move, the Modi administration has given a much-awaited boost to its central employees by announcing a 4% increase in the Dearness Allowance (DA). This decision was green-lighted in a recent cabinet meeting.
Implications for Salaries
For central government employees receiving the minimum basic salary of ₹18,000, the increment means their monthly DA would amount to ₹8,280, calculated at 46% of the base. Conversely, employees at the higher basic salary slab of ₹56,900 will see an addition of ₹26,174, based on the 46% DA.
This enhancement is expected to benefit around 47 lakh employees, along with 68 lakh pensioners. Not only will the employees experience a bump in their salaries, but pensioners will also receive a higher Dearness Relief (DR).
Understanding the DA
The central government routinely reviews the DA every six months to help its workforce counteract the rising inflation rates in the country. The DA serves as a buffer against the escalating costs of living.
A Rise to 46%
Post the government’s approval, the DA for central employees has been elevated from 42% to 46%. The new rates will be effective from July 1, 2023, and the DA arrears from July to October will also be disbursed. From November, the salary calculations will be based on the revised 46% DA.
It’s noteworthy that following the footsteps of the central government, state governments too grant DA to their employees. Typically, the government bases its DA computations on the Consumer Price Index (CPI).
