7th Pay Commission: The wait for a much-awaited increase in dearness allowance (DA) and dearness relief (DR) for over one crore central employees and pensioners is soon coming to an end. As per media reports, the central government is poised to announce the raise in DA and DR in the upcoming month of September.

Additionally, positive news surrounds the implementation of a 3% DA hike for central employees effective from July 1, 2023. This adjustment, in line with the AICPI index, is indicative of a consistent trend. Based on recent AICPI index figures, it is projected that central employees will experience a 4% DA increase for the third consecutive time.

7th Pay Commission: Calculation of DA

The calculation of the Dearness Allowance relies on the AICPI index data published by the Ministry of Labor. Presently, this data points to a 4% rise in DA. Notably, the central government reviews and enhances DA and DR biannually in January and July, guided by the AICPI index.

January recorded an AICPI index of 132.8, followed by 132.7 in February, 133.3 in March, 134.2 in April, 134.7 in May, and 136.4 in June. Consequently, the DA Hike figure reached 46.24% in June. Given these metrics, speculation suggests that central employees might witness a successive 4% increment, elevating the total from 42% to 46%.

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DA, DR Increase

Actually, the central government reviews and increases DA and DR twice a year in the months of January and July, based on the number of AICPI index. If you look at the numbers of AICPI index, it was 132.8 in January, 132.7 in February, 133.3 in March, 134.2 in April, 134.7 in May and 136.4 in June. Whereas in June, the DA Hike score increased to 46.24 per cent. Based on this, it is now being speculated that the DA of central employees may be increased by 4 per cent for the third time in a row and it may increase from 42 to 46 per cent.

Final Decision Yet to Come

However, the precise increment in DA will only be discernible upon the government’s official announcement, as the final decision rests with the government. A green light from the Union Cabinet is essential before any conclusions can be drawn regarding DA Hike.

Should the dearness allowance indeed increase by 4% this time, it could elevate the percentage to 46%. Consequently, central employees’ annual salaries might experience an upswing ranging from Rs 8,000 to Rs 27,000.