7th Pay Commission DA Hike: AICPI-IW Figures were slashed by 0.5 points to 143.2 in January. This is the second consecutive month-on-month drop. In December 2024, The AICPI-IW was decreased by 0.8 point to 143.7 as compared to 144 in November 2024. Notably, the Dearness Allowance (DA) increases are calculated by the average All India Consumer Price Index (AICPI-IW) for industrial workers, which measures fluctuations in the cost of living.

Let’s figure out, how the DA is calculated:

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

Notably, if the cost of living increases, the government provides more DA/DR hike to government employees and pensioners.

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7th Pay Commission DA Hike: More Details

The government is expected to announce the hike Dearness Allowance (DA) and Dearness Relief (DR) soon. Moreover, the 1.2 crore central government employees and pensioners are now eagerly waiting for the announcement of DA/DR hike.

The DA/DR is hiked twice a year, with the first increase comes into effect from January 1 and the another one is effective from July 1. Notably, the central government employees and pensioners are paid under the 7th Pay Commission. Currently, central government employees receive Rs 18,000 as minimum basic salary. Meanwhile, central government pensioners get Rs 9,000 as minimum basic pension.

Rupak Sarkar, president of the Confederation of Central Government Employees and Workers, recently told NDTV Profit, “As per our calculation, the dearness allowance hike will probably be of 2%.” According to a report by the Financial Express, this will be the lowest DA hike in the last 7 years.

Pay Increases

If an individual has the current minimum basic salary of Rs 18,000 and the DA for January 2025 is increased by 2%, his/her minimum salary will rise by Rs 360. Moreover, 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 55%, he/she will be paid Rs 27,900.

If an individual has the current minimum basic pension of Rs 9,000 and the DR for January 2025 is increased by 2%, his/her minimum pension will rise by Rs 180. Under current 53% DR, he/she is entitled to the pension (minimum basic pay + DR) of Rs 13,770. However, if the DA is increased to 55%, he/she will be paid Rs 13,950.