7th Pay Commission: Central government employees and their families are eagerly awaiting updates on the upcoming increase in Dearness Allowance (DA) in January next year. The Central Government is anticipated to announce the DA/DR for July this year in September. An important announcement is set to be made within two days regarding the DA hike for January. The Ministry of Labor will release the AICPI (All-India Consumer Price Index) for July on August 31, which will provide insights into the potential DA hike for the coming year.
It’s important to note that DA is adjusted twice annually by the government. The first adjustment takes place in January, while the second one is implemented on July 1. Although the announcements are usually made with a delay of two to three months, the DA hike’s effective date remains the same. If the government declares the DA/DR hike in September, it becomes applicable from July 1.
DA is projected to increase to around 45 per cent. The decision on the dearness allowance is based on the AICPI index data. The index figures for dearness allowance from January to June have surpassed 3 points. Although the government disregards decimal points, expectations are that the DA will rise by 3 per cent, reaching 45 per cent from the current 42 per cent. Nevertheless, there is a demand from employees for a 4 per cent increase in DA. The revised allowance will be disbursed from July 1.
The 7th Pay Commission dictates that an increase in House Rent Allowance (HRA) will occur in conjunction with DA hikes. This rise becomes more substantial when the dearness allowance crosses 50 per cent. Currently, HRA varies based on the city category, namely X, Y, and Z. Employees in X cities receive the highest HRA, followed by Y and Z city residents. The respective HRA percentages are 27, 18, and 9 per cent, in line with the city category.
