7th Pay Commission: Good News! Central govt employees expected to get up to Rs 10,000 hike in July salary

7th Pay Commission latest news: Good news for Central government employees is on its way as they may get a huge pay hike by the end of July. Earlier, Centre has hinted to the staffers that it will increase the Dearness Allowance (DA) from July 1, 2019. The hike in the DA is expected to be from 4 to 5 per cent. However, if not increased by up to 4 per cent, still it will boost the central government employees salary from s 720 to Rs 10,000 per month depending on seniority and other relevant factors.

Staffers DA at 12 per cent 

At present, the Dearness Allowance (DA) of central govt employees is 12 per cent. If the DA is hiked by 4 per cent, it will increase to 16 per cent. Following which, the salary will increase by Rs 720 per month of the lower-level officials. While the highest level officers will get a hike of Rs 10,00 per month under the 7th Pay Commission pay level 18.

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AICPI data for June month awaited:

According to reports, All India Consumer Price Index or AICPI data until June has not yet come. Once data is released, the figures on DA increment will be released by the end of July for central government employees drawing salaries based on 7th pay commission. Notably, it will be the biggest increase in the DA since the implementation of the 7th pay scale in 2016.

DA and AICPI

DA is linked to the All India Consumer Price Index (AICPI). For DA calculation, AICPI average is taken in the formula.

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What is Dearness Allowance (DA)

Dearness Allowance (DA is part of the Basic Salary paid to government employees. DA is directly linked to 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.

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

The 7th Pay Commission is an administrative system that is set up by the Government of India to determine the salaries of government employees. It benefits 1 crore, central government employees, including around 53 lakh pensioners. 

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