7th Pay Commission Latest News: Here comes a big update for the Central government employees who are waiting for a hike in dearness allowance (DA). Various media reports suggest that the Centre is expected to announce a second increase in Dearness Allowance (DA) and Dearness Relief (DR) for employees and pensioners in September 2024. Once implemented, the new DA hike will be effective from July 2024.
Reports also suggested that the Central government may approve a 3% hike for the government employees and pensioners. Currently, the DA stands at 50%. With the latest DA hike, it might rise to 53% from July 2024.
However, the Centre is unlikely to release the 18-month DA and DR arrears that were on hold during the COVID-19 pandemic. Moreover, there are no official announcements regarding the release of the DA arrears.
Once the latest DA hike is announced, it will benefit thousands of central government employees and pensioners whose salaries are based on the 7th Pay Commission recommendations.
It should be noted that the last DA increase, effective from January 1, 2024, was announced on March 7, 2024, increasing DA to 50%. This latest adjustment also helped other allowances, including House Rent Allowance (HRA).
Usually, the Centre announces DA/DR hike twice in a year – first in March and then in September, with changes applied retroactively from January and July.
What is Dearness Allowance?
The Central government grants Dearness Allowance to its employees and pensioners to offset the impact of inflation and it is being granted to them to cope with increasing prices. The DA is also given to government employees to shield them from the adverse effects of inflation.
Latest changes in DA
The for central government employees has recently been increased by 4% to to a total of 50% from the previous rate of 46%. This increase was effective January 1, 2024. Moreover, the Dearness Relief (DR) for central government pensioners has also risen by 4% to reach 50%.
Check calculation of Dearness Allowance
For Central Government Employees
DA% = [(Average of AICPI (Base Year 2001 = 100) for the last 12 months – 115.76)/115.76] x 100
For Public Sector Employees
DA% = [(Average of AICPI (Base Year 2001 = 100) for the last 3 months – 126.33)/126.33] x 100
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