Central Employees Receive DA Hike as per the 7th Pay Commission
DA Hike: Central government employees have been greeted with a pleasant announcement. The dearness allowance (DA) has been increased by 4%, elevating the total to 46%. This decision, approved on a Wednesday by the Cabinet, promises more good news for the employees, suggesting that there’s more to look forward to in the upcoming festive season.
DA Hike The Anticipation of the Next Increment
The implemented hike will be effective from 1st July 2023. But, the buzz now is about the next increment. Two main factors feed this anticipation. First, the AICPI (All India Consumer Price Index) for two months has been released and shows a significant increase. However, the final hike will be decided based on the inflation index numbers from July to December, setting the tone for the increase in DA in the coming year. Notably, the numbers for July and August have demonstrated an encouraging surge.
7th pay commission da hike What’s Behind the Buzz?
The second major reason for the heightened discussion around the 2024 dearness allowance is the prospect of reaching the 50% DA mark. Reaching this milestone would reset it to zero, which is an established provision. Given that general elections are scheduled for next year, employees might be in for a substantial bonus. Upon reaching the 50% threshold, the DA is integrated into the basic pay. This adjustment could result in a substantial increase, potentially a minimum of 9000 rupees in the salary.
AICPI Index Overview
The Labour Bureau has released the AICPI index number. The numbers for July and August have been made public, and the September index will be announced on 31st October. Currently, the index stands at 139.2 points, which translates to a total DA of 47.97%. Based on the numbers till June, a 4% increment was made, with the total dearness allowance at 46.24%. Now, the figures for September through December will determine the DA increase from January 2024. According to experts, the dearness allowance is likely to cross the 50% mark by January 2024.
Implications of a 50% DA
According to the 7th pay commission, once the DA crosses the 50% mark, it will be reset to zero. This means the DA calculation will start afresh from zero and the accumulated allowance, up to 50%, will be merged with the basic salary. If an employee has a basic salary of 18,000 rupees, they would receive an additional 9,000 rupees with the 50% DA. However, once the DA hits 50%, it will be added to the basic salary, essentially resetting the DA to zero and adding the 9,000 rupees to the base salary.
7th pay commission DA Hike Why is the DA Reset?
When a new pay scale is implemented, the DA that employees receive is integrated into the basic salary. Ideally, the percentage of DA should be combined with the primary salary, but financial constraints often prevent this. Nevertheless, in 2016, such an integration was carried out.
In essence, central employees have much to look forward to, as the prospects of a salary hike and further bonuses loom large on the horizon.
