7th Pay Commission: Central government employees are awaiting the next dearness allowance (DA) revision, which is scheduled for this month. However, based on past trends, the official announcement is likely to be made in the first week of March, due to the usual lag in releasing the AICPI-IW data, which determines the DA hike. The Labour Ministry has released the AICPI data for November 2024, which remained steady at 144.5 points, which means a 3% increase in DA may be the case. This may boost the DA/DR rate to 56% effective from January 2025.
However, the government is holding off on finalizing the DA hike until the December Consumer Price Index for Industrial Workers (CPI-IW) numbers are released. November’s year-on-year inflation rate has decreased to 3.88% from 4.98% in November 2023. This suggests a likely DA hike of 2% or 3% under the 7th Pay Commission.
According to media reports, the DA rate will be 56% if the December 2024 index changes by up to 0.5 points, but may drop to 55% if it decreases by 0.6 points or more.
Furthermore, the Central Government revises the DA for its employees and the Dearness Relief (DR) for pensioners twice a year, once for the January-June period and next for the July-December period.
7th Pay Commission: Last DA Hike
In October, the Centre announced a 3% DA hike for the July-December period, increasing the total DA to 53%.
Typically, DA hikes are announced with a 2-month delay, and employees/pensioners receive 2 months’ arrears with their March or September/October salaries/pensions.
How Much Increase In The Basic Pay?
If an individual has the current minimum basic pay of Rs 18,000 and the DA for January 2025 is increased by 3%, his/her minimum salary will rise by Rs 540.
Under current 53% DA, he/she is entitled to the salary (minimum basic pay + DA) of Rs 27,540. However, if the DA is increased to 56%, he/she will be paid Rs 28,080.
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