7th Pay Commission: With the beginning of the New year 2025, the Central government employees are now eagerly awaiting for the announcement on next hike in dearness allowance for the January-June cycle. The per the Central government guidelines, the Centre revises dearness allowance (DA) and dearness relief (DR) for over 1 crore central government employees and pensioners twice a year — first in July and second in October. However, as the process depends on the All-India Consumer Price Index (AICPI) numbers, the official announcement may face delays.
How is DA calculated?
The Central government revises Dearness Allowance depending on the cost of living based on AICPI data. The Central government will first review the index for January-June and July-December periods and then will announce the revisions after evaluating the 12-month average AICPI.
The government employees must be knowing that the DA/DR revision is based on the increase in the All India Consumer Price Index (AICPI) over a 12-month period and the calculation DA hike is – [(Average AICPI for the past 12 months (Base Year 2001=100) – 115.76) / 115.76] x 100.
How much can DA hike can be expected?
According to October 2024 data, the AICPI went up to 144.5 and is likely to rise to 145.3 once November and December data come, which would result in a DA increase to 56% in January 2025. Right now, the the dearness allowance of the government employees stands at 53%, which was hiked in October this year before Diwali.
When will next DA hike be announced?
For the announcement on DA hike, the Centre will need the November and December 2024 data. The November data is expected by January 1st week and December number will come in February 2025 and then the next revision may be announced by February end. As per the past trends, the government announces DA hikes for both six-month cycles with a two-month lag and provides arrears to employees and pensioners.
