7th Pay Commission Alert: Will The Government Announce DA Hike Before This Diwali? Check Latest Updates Here

7th Pay Commission Update: The Modi government is reportedly considering announcing the Dearness Allowance (DA) hike for all Central government employees and pensioners soon. Media reports have highlighted that the Central government is likely to announce the DA Hike between Navratri and Diwali. The DA hike, once announced, will become effective from July 1, 2023.

How much DA hike is expected this time?

Experts suggest that the government can likely announce a 4% DA hike, however, the figure could rise further. One should note that the government increases the dearness allowance periodically to help government employees and pensioners combat inflation.

Currently, the central government employees and pensioners get a 42% dearness allowance. So, following the revision, the DA is expected to be increased to 46%. If this happens, 46% DA will be effective from July 1, 2023.

Usually, the DA is revised in January and July. However, this time the announcement regarding the hike in DA is a bit delayed as we have already entered the first week of October.

So, what's the formula to calculate DA hike for government employees and Pensioners?

For central government employees, the DA is calculated on the basis of the latest Consumer Price Index for Industrial Workers (CPI-IW).

According to the Economic Times report, if we look at CPI-IW Base Year 2001=100 from July 2022 to June 2023, we see the Average of AICPI-IW in the last 12 months is 382.32.

7th CPC DA% = [{Average of AICPI-IW (Base Year 2001=100) for the last 12 months - 261.42}/261.42x100]
=[{382.32-261.42}/261.42x100]
= 46.24

Thus, when the average CPI-IW for the past 12 months stood at 382.32, given this formula the DA will come out to be 46.24%.

How much your salary will increase if DA is hiked by 4%?

DA to be hiked by 4%: How central govt employees' salary will increase

Remember that when DA increases the salary of the central government employees goes up.

To understand this with the help of an example, let us assume a central government earns a basic salary of Rs 38,500 per month. At 42%, his DA was at Rs 16,170. Now, if the DA increases by 4% from July 2023, the individual's DA will be hiked to Rs 17,710. Thus, his in-hand salary will likely be increased by Rs 17,710 -Rs 16,170 = Rs 1,540 per month.