DTI News

February 25, 2024
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7th Pay Commission: Second DA hike for Central Govt employees likely to be announced in October

New Delhi: The long and anxious wait for lakhs of central government employees and pensioners, eagerly anticipating the next Dearness Allowance (DA) and Dearness Relief (DR) hike as per the 7th Pay Commission, may soon come to an end. Sources indicate that the Central Government could make an announcement regarding the second DA hike of 2023 within the next month.

This upcoming DA hike, whenever officially announced, will retroactively apply from July 1, 2023. Although employees had been pressing for a 4 percent increase in DA, the anticipated figure is expected to be around 3 percent. Nevertheless, this raise will come as a welcome relief to central government employees, providing them with some respite in the face of rising inflation.

The calculation of DA hike for central government employees and pensioners relies on the monthly data of the Consumer Price Index for Industrial Workers (CPI-IW) released by the Labor Bureau.

In fact, Shiv Gopal Mishra, the general secretary of the All-India Railway Federation, had stated last month, “CPI-IW for June 2023 was released on July 31, 2023. We are demanding an increase in dearness allowance by four percentage points.” However, it appears that the government is contemplating a hike of slightly over three percentage points. As a result, it is likely that the DA will rise to around three percent, reaching a total of 45 percent.

Mishra had said in a statement given to news agency PTI that it is certain that dearness allowance will be given at 3 percent, but we are demanding from the government to increase it by 4 percent. His statement gained momentum that there will be an increase of 3 percent in the dearness allowance of central employees. However, no concrete reason was given as to why the government would increase it by 3 percent or on what basis this figure of 3 percent was arrived at?

How much will be the difference in salary?

According to the 7th Pay Commission, the basic salary of central employees starts from Rs 18000 to the maximum bracket of Rs 56900. Look at the calculation done on this basis below…

1. Basic salary of employee                                  Rs 18,000
2. New dearness allowance (46%)                        Rs 8280/month
3. Till now dearness allowance (42%)                   Rs 7560/month.
4. How much dearness allowance increased?         8280-7560= Rs 720/month
5. Increase in annual salary                                 720X12= Rs 8640

Understand the calculation of index here

MonthIndex data Dearness allowance
January 2023132.8 points43.08 percent
February 2023132.7 points43.79 percent
March 2023133.3 points44.46 percent
April 2023134.2 points45.06 percent
May 2023134.7 points45.58 percent
        June 2023           136.4 points               46.24 percent
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