7th Pay Commission: The Modi government at the Center may soon announce an increase in dearness allowance, i.e., DA. Following this, central employees’ salaries will experience a significant boost, akin to a generous gift. Some reports suggest that we will likely make this announcement in the last week of September or the first week of October.
Last year, the government announced an increase in DA in the first week. We expect the government to increase DA by 4 percent starting from July 1, 2024. If the government increases DA to this extent, it will result in a significant salary increase. We decided to increase DA by 4 percent to 50 percent of the basic salary. Central government employees receive dearness allowance, while pensioners receive dearness relief.
Will the basic salary and DA now merge?
Experts advise against merging dearness allowance with basic salary if it exceeds 50 percent. It will remain like this until the 8th Pay Commission is formed. Instead of mergers, there are provisions for increases in allowances, such as HRA when DA crosses 50%.
Will there be an 8th Pay Commission?
Central government employee unions have demanded the formation of the 8th Pay Commission, but at present the government does not have any proposal for its formation. In response to a written question in the Rajya Sabha on July 30, Minister of State for Finance Pankaj Chaudhary stated, “We have received two representations for the formation of the 8th Central Pay Commission in June 2024.” Currently, there is no proposal from the government on this.
In February 2014, the government constituted the 7th Pay Commission, and on January 1, 2016, it implemented its recommendations. Usually, the government establishes a pay commission to revise government employees’ salaries every 10 years.
How does the government decide on the DA hike?
The government bases its decision to increase DA and DR on the percentage increase in the 12-month average of the All-India Consumer Price Index (CPI-IW). Every year, the government revises the allowance on January 1 and July 1, usually announcing the decision in March and September/October.
For information, let us tell you that in the recent monsoon session of Parliament, Minister of State for Finance Pankaj Chaudhary said that the government will revise the 18-month salary paused during the COVID-19 pandemic. There is little hope of releasing DA and DR arrears. When asked if the government is considering releasing 18 months’ worth of dearness allowance for central government employees and pensioners, he clearly stated “no.
