7th Pay Commission DA Hike: Central employees will not have to wait much longer to increase their Dearness Allowance (DA) and pensioners in Dearness Relief (DR). A final decision can be made on this at the meeting of the Union Cabinet. If approved, the new DA will come into effect from January 2025, that is, employees will get two months’ arrears (DA Arrears) along with the increase in March salary.
DA is likely to increase by only 2 percent
For the last few years, the central government has been announcing an increase in DA every time around Holi. But this time employees may be disappointed with the percentage of increase. In fact, according to the data of the All India Consumer Price Index (AICPI), this time there is a possibility of only a 2 percent increase in DA, which will be the lowest in comparison to the last 7 years. Since July 2018, the government has increased DA by at least 3% or 4% every time and sometimes this percentage has been even higher. In such a situation, an increase of only 2 percent in DA can disappoint central employees and pensioners.
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DA was not increased during Covid, now employees are demanding arrears
During the Kovid-19 pandemic, the government banned the DA hike for a total of 18 months from January 2020 to June 2021. Employee unions have been demanding compensation for this period since then, as three DA hikes were not done during this period. Let us tell you that the DA hike happens twice a year – once it is done in March for the period from January to June and the second time it is announced in October-November for the period from July to December.
Under the 7th Pay Commission implemented in January 2016, the 125% dearness allowance (DA) was merged with the basic salary. After this, the first DA hike of 2% took place in July 2016 and since then dearness allowance and dearness relief for central government employees and pensioners have been revised twice every year. The period from January 2020 to June 2021 can be seen as an exception, when for these 18 months the government had put a stop to the DA hike citing sluggish economic growth and financial crisis.
The least DA hike since July 2018
This 2% increase in DA will be the lowest since July 2018 or in about 78 months. The previous lowest hike was made for the period from July to December 2018 and even then only 2% was increased.
How is dearness allowance decided
The rate of dearness allowance (DA) is decided based on the All India Consumer Price Index for Industrial Workers (AICPI-IW), which is released by the Labour Bureau. By analysing the AICPI-IW data of the last 6 months, the government decides the rate of increase in DA for the next 6 months.
Now all eyes are on the government’s decision
At present time, All central employees and the pensioners are eagerly waiting for the government’s decision on 8th pay commission. It is expected that more than 2% DA will be increased, otherwise, it will be the lowest in the last 7 years. More than one crore central employees and pensioners have their eyes on the government’s decision. Now it has to be seen what decision is taken on this in the cabinet meeting.
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