Union Cabinet Approves 4% Hike in DA Under 7th Pay Commission; Govt Employees’ Salaries To Rise

DA Hike 7th Pay Commission: In a decision that will benefit 50 lakh central government employees and 65 lakh pensioners, the Union Cabinet has approved a hike of 4 per cent in dearness allowance (DA) and dearness relief (DR), effective July 1, 2022. The 4 per cent hike will now take the DA to 38 per cent.

While addressing a Cabinet briefing on Wednesday, Union Minister Anurag Thakur said that the decision will cost Rs 12,852 crore to the government exchequer.

“Cabinet approves release of additional instalment of Dearness Allowance and Dearness Relief @ 4% to Central Government employees and pensioners, due from 01.07.2022,” PIB said in a tweet on Wednesday.

Cabinet approves release of additional instalment of Dearness Allowance and Dearness Relief @ 4% to Central Government employees and pensioners, due from 01.07.2022#CabinetDecisions

— Satyendra Prakash (@DG_PIB) September 28, 2022

DA and DR are revised twice a year on the basis of retail inflation-industrial workers. Dearness allowance (DA) is given to government employees, while dearness relief (DR) is for pensioners.

The retail inflation for industrial workers remained high for the past few months. It stood at 6.16 per cent in June 2022, which was lower than 6.97 per cent in May 2022 but higher than 5.57 per cent in June 2021, due to lower food and fuel prices. The all-India CPI-IW (consumer price index for industrial workers) for June 2022 witnessed an increase by 0.2 points and came in at 129.2 points. The CPI-IW in May was 129 points.

How is DA under 7th Pay Commission Calculated?

In 2006, the central government had revised the formula to calculate the DA and DR for central government employees and pensioners.

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.

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