DA Hike 7th pay commission: Good news for central government employees! The government is expected to hike dearness allowance (DA) for staff in service and dearness relief (DR) for pensioners by 4 percent as early as next month, according to a report published in Mint.
DA Hike and DR Boost
The raise, however, in the DA and DR will be effective from January 1, 2024. The central government hikes DA twice a year, in January and July. Although the central government revises the allowances on January 1st and July 1st of each year, the decision is usually announced in March and September. After the upcoming DA hike, both employees and pensioners will be benefitted.
At present, the DA is fixed at 46 percent and with this hike, it will surpass the 50 percent mark.
The government hikes DA for employees and pensioners based on the monthly Consumer Price Index for Industrial Workers (CPI-IW) released by the Labour Bureau.
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Methodology and 7th Pay Commission Recommendations
The DA hike will be as per the approved formula, which is based on the recommendations of the 7th Central Pay Commission. In October 2023, the Cabinet had increased DA for government employees and Dearness Relief (DR) for pensioners by four percent.
The decision benefited 48.67 lakh central government employees and 67.95 lakh pensioners. Earlier, the government had approved Samriddhi salary and Diwali bonus for paramilitary forces, including gazetted Group B level officers. For 2022–2023, the Finance Ministry had set a limit of Rs 7,000 for calculating non-productivity linked bonus (ad hoc bonus) for central government employees.
Inflation-driven Decisions: Understanding DA Hike
The government determines the increase in DA given based on the inflation rate of the country. If inflation is high, there are chances that DA will be increased further. The increase in DA and DR is determined by the percentage increase in the 12-month average of the All India Consumer Price Index (AICPI) for the financial year.
Meanwhile, West Bengal Chief Minister Mamata Banerjee had announced in December 2023 that her government would give a four percent increment to all its employees from New Year’s Day.
“I announce that all 14 lakh state government employees, teaching and non-teaching staff of all schools, colleges and universities, and employees of all statutory undertakings and parastatals and pensioners would be getting another instalment of 4 per cent DA from January 1, 2024,” the West Bengal CM said.
Earlier this month, the Yogi Adityanath-led government approved a 10% increase in dearness allowance for general road transport employees, taking the total to 38 per cent. The move will benefit around 12,000 employees. West Bengal is another state that has increased the DA limit for its employees. The state has announced a 4% increase in Dearness Allowance (DA) for state government employees.
