According to the 7th Pay Commission, the federal government would likely boost the dearness allowance (DA) for its employees and pensioners by four percentage points, from the current 38 per cent to 42 per cent. It is also anticipated that the Dearness Relief (DR) increase for central government retirees would be announced. There is, however, no official announcement on this.
As per the speculations, employees could receive their revised salary from March 31, 2023. Apart from this, the arrears for the months of January and February will also be added to the final amount, according to a report by PTI(7th Pay Commission).
What is DA(Dearness Allowance)?
Dearness Allowance (DA) is the cost-of-living adjustment benefit that the government provides to both current and retired members of the public sector.
On the other hand, central government retirees receive dearness assistance (DR), which is equivalent to an allowance.
When and why govt revise DA/DR?
Every six months, the government typically updates the DA/DR rate. This is done to make up for the monthly salary/pension wealth’s diminished purchasing power brought on by inflation.
How is the DA increase decided?
The Labour Bureau releases the most recent Consumer Price Index for Industrial Workers (CPI-IW) each month, which is used to calculate the dearness allowance for employees and pensioners. A division of the Labor Ministry is the Labor Bureau.
How DA is calculated?
For central government employees: The DA is calculated as — {(Average of the All-India Consumer Price Index (Base year -2001 =100) for the last 12 months -115.76)/115.76} x 100.
Meanwhile, for central public sector employees, the DA is calculated as — {(Average of the All-India Consumer Price Index (Base year -2001 =100) for the last 3 months -126.33)/126.33} x 100.
