7th Pay Commission: Here's good news for Central government employees. According to reports, the Central government employees would be getting 17 per cent Dearness Allowance (DA) for July 2019 by October 2019. Earlier, Centre had hinted the staffers an increase in the Dearness Allowance (DA) from July 1, 2019. The hike in the DA is expected to be around 5 per cent for July-December 2019 period. At present, DA for Central govt employees is 12 per cent, which was implemented in January 2019.
The All India Consumer Price Index Numbers (AICPIN) confirmed the five per cent DA raise for government employees. The AICPIN for June 2019 is 316, which is two points more than May 2019 AICPIN, a report said.
DA hike in salary:
Central Government employees need to keep tracking latest announcement as the July 2019 DA might get reflected in October 2019 salary. Since long, they have been waiting for a formal announcement to be made by the government.
According to media reports, the DA announcement may be delayed until September 2019.
What is Dearness Allowance (DA)
Dearness Allowance (DA is part of the Basic Salary paid to government employees. DA is directly linked to the cost of living (CoL) adjustment allowance paid to government employees and pensioners linked to the Consumer Price Index to offset the impact of inflation. DA is fully taxable. In January 2019, the Central Government had increased the DA by three per cent.
DA is decided on the basis of the city that varies depending on the employee's office location. DA will be more for the employees in the urban area. While for semi-urban areas and villages employees DA will be less.
DA and AICPI
DA is linked to the All India Consumer Price Index (AICPI). For DA calculation, AICPI average is taken in the formula
How is DA calculated:
For the employees of Central Government
Percentage of DA = {(Average of the All-India Consumer Price Index (Base year -2001 =100) for the last 12 months -115.76)/115.76} x 100
For Central Public Sector Employees
Percentage of DA = {(Average of the All-India Consumer Price Index (Base year -2001 =100) for the last 3 months -126.33)/126.33} x 100
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