7th Pay Commission: Central Govt Employees Likely To Get 3-4% DA Hike In July 2023; Details Here

7th Pay Commission Update: In good news for central government employees, the Centre is likely to hike dearness allowance (DA) next month, July 2023, thus raising their salaries, according to media reports. The DA hike is likely to be 3-4 per cent, to compensate central government employees and pensioners for rising prices.

The DA is hiked twice a year — January and July. The last hike was announced in March 2023, which became effective from January 1, 2023. In the hike, the DA was raised by 4 per cent to 42 per cent.

Now, according to the latest reports, the central government might decide to hike DA by 4 per cent, following which the DA will increase to 46 per cent.

Dearness allowance (DA) is given to government employees, while dearness relief (DR) is for pensioners. According to the official data, there are 47.58 lakh central government employees and 69.76 lakh pensioners. After the upcoming DA hike, these employees and pensioners will be benefitted.

The DA is given to employees based on the basic pay of the employees, while the DR is given on the basis of a basic pension.

State governments separately announce hikes for their employees. Recently, Jharkhand and Himachal Pradesh announced their salary hikes for their state government employees and pensioners.

How Much Will Salary Increase?

If a government employee’s monthly take-home salary is about Rs 42,000 and the Basic Pay is around Rs 25,500; then he/ she now gets Rs 9,690 as the dearness allowance. Now, in the case of a 4 per cent DA hike, this DA amount will increase to Rs 10,710. So, there will be an increase of Rs 1,020 in monthly take-home salary in this case.

Similarly, the monthly pension will also increase for 69.76 lakh pensioners. For example, if someone gets a basic pension of Rs 30,000 a month, then he gets Rs 11,400 as dearness relief. After a 4 per cent DR hike, the amount will increase to Rs 12,600, thus raising the pension by Rs 800 per month.

How Is DA Hike Calculated?

The central government revises the DA and DR for employees based on a formula. Following is the formula:

Dearness Allowance Percentage = ((Average of All-India Consumer Price Index (Base Year 2001=100) for the past 12 months -115.76)/115.76)x100.

For Central public sector employees: Dearness Allowance Percentage = ((Average of All-India Consumer Price Index (Base Year 2001=100) for the past 3 months -126.33)/126.33)x100.