7th Pay Commission: Recently, the Central Government of India increased the Dearness Allowance (DA) for currently active employees and the Dearness Relief (DR) for retired pensioners by 3%. This hike came into effect on July 1 and will be in force until December 2024. The DA for employees is 53% of the basic pay since July 1, 2024.
The recent increase in DA to 53% has raised questions about a potential merger of DA with the basic pay. This speculation arises from a similar situation from 2004, the DA was merged into basic pay after crossing the 50% threshold by the Government.
Considering the history, people speculate that the government may again merge the DA into the basic pay if it surpasses 53%. This would lead to higher salaries and pension benefits for employees and pensioners. Although the government has given its stance on the merging of DA into Basic pay. The DA wil not be merged in basic pay even after crossing the 50% threshold.
What Is DA?
The cost of living adjustment given by the government to both current and retired public sector employees. It is calculated as a percentage of the employee’s basic salary and varies based on location
Next DA Hike Announcement:
Everyone is eagerly waiting for the next DA announcement, which happens twice a year—once in March and again in September or October. The announcement becomes effective in January and July, respectively. The next DA hike is scheduled to be announced in March 2025, before Holi. It will be effective from January 2025. The central government usually receives their salary for April and October with an added arrear of 2-3 months.
How To Calculate DA?
- For Central Government Employees:
- DA% = [(Average of AICPI (Base Year 2001 = 100) for the last 12 months – 115.76)/115.76] x 100
- For Central Public Sector Employees:
- DA% = [(Average of AICPI (Base Year 2001 = 100) for the last 3 months – 126.33)/126.33] x 100
Where, AICPI stands for All-India Consumer Price Index.
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