Central government employees are waiting for the next announcement regarding the hike in Dearness Allowance (DA), which is expected this month. Media reports suggest a possible 3% to 4% increase in DA, which could be announced just before the festive season of Dussehra and Diwali. This comes as welcome news for employees and pensioners alike, as DA adjustments help offset rising living costs.
What is Dearness Allowance (DA)?
Dearness Allowance, or DA, is a critical part of a government employee’s salary. It is a cost of living adjustment allowance paid by the government to its employees and pensioners to help manage inflation. Pensioners receive Dearness Relief (DR), which works similarly to DA for employees. These allowances are reviewed twice a year—in January and July—to accommodate changes in the cost of living.
How is DA Calculated?
The calculation of DA is based on the All India Consumer Price Index (CPI-IW) for industrial workers. The DA percentage is determined by the average rise in the CPI-IW over 12 months. This ensures that employees receive allowances to cope with inflation and rising expenses.
The formula for calculating DA for central government employees is:
Dearness Allowance (%) = [(Average of CPI-IW for last 12 months – 115.76) / 115.76] x 100
For employees in central public sector enterprises, the formula is slightly different:
DA (%) = [(Average of CPI-IW for last 3 months – 126.33) / 126.33] x 100
Both these formulas help ensure that DA keeps pace with inflation, providing employees with necessary financial support.
When Will the DA Hike Be Announced?
While the official announcement is awaited, it is likely to happen soon, with speculation pointing to an increase of 3% to 4%. Such hikes are typically implemented with retroactive effect, meaning employees may receive arrears along with the new DA rate.
Current Demands: The Call for the 8th Pay Commission
There is increasing pressure on the government to set up the 8th Pay Commission, as it has been over 10 years since the 7th Pay Commission was formed. Employee unions have been vocal about their demands for salary revisions and are pushing for the formation of the 8th Pay Commission. However, in a recent response to the Rajya Sabha, Union Minister of State for Finance Pankaj Chaudhary indicated that the government is not currently considering this demand.
The 7th Pay Commission was formed in February 2014, and its recommendations were implemented from January 1, 2016. Given that pay commissions are typically set up every 10 years, employees are hoping the government will take action soon.
What’s Next for Central Government Employees?
The upcoming DA hike is expected to provide some relief to central government employees amid rising inflation. Meanwhile, employee unions continue to push for the 8th Pay Commission, but no official decision has been made. As the festive season approaches, the government’s next move on DA will be crucial in determining the financial well-being of its employees and pensioners.
