In the midst of the festive season, the government is gearing up to announce a significant revision in the Dearness Allowance (DA) and Dearness Relief (DR) for pensioners and central government employees under the 7th Pay Commission. While no official statement has been released, there are speculations that the much-awaited announcement might be made on Wednesday, October 18.
According to media reports, the central government is contemplating a 4% DA hike, potentially increasing the current 42% to 46%. However, the final decision rests with the government and is subject to cabinet approval. The increase in dearness allowance is expected to be effective from July 1, 2023, with the DA rate being determined by the All India Consumer Price Index (AICPI) from January to June.
For individuals with a minimum basic salary of Rs 18,000, the current 42% DA provides a monthly increase of Rs 7,560. With the new DA rate at 46%, this monthly increase is expected to rise to Rs 8,280, resulting in an annual salary increase of Rs 8,640.
Similarly, for those with a maximum basic salary of Rs 56,900, the current 42% DA adds Rs 23,898 to their monthly earnings. Following the proposed DA hike to 46%, this monthly increase is anticipated to escalate to Rs 26,174. Consequently, individuals with this higher basic salary can expect a substantial annual salary increase of Rs 27,312.
What are DA and DR?
Dearness Allowance (DA) is an allowance provided by the government to public sector employees to adjust their salaries to the cost of living due to inflation. Dearness Relief (DR) is a similar benefit provided to central government pensioners.
Why does the government revise DA/DR?
The government revises the DA/DR rate every six months to offset the decrease in purchasing power caused by inflation.
How is DA calculated?
DA is calculated as a percentage of the basic salary using the formula:
Dearness Allowance percent = ((Average of AICPI (Base Year 2001=100) for the past 12 months – 115.76) / 115.76) * 100
(Edited by: Amrita)
First Published: Oct 12, 2023, 10:48 AM IST
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