7th Pay Commission Update: Even as the DA hike of central government employees is awaited, the government has released the latest AICPI Index data. The data for July shows that the Index of retail inflation for industrial workers, on the basis of which the dearness allowance (DA) is revised, increased by 0.7 points. It raises the chances of a hike in DA for central government employees.
The All-India CPI-IW for July 2022 increased by 0.7 points and stood at 129.9 points, compared with 129.2 points in June 2022. The Index is compiled for 88 centres and All-India and released on the last working day of the succeeding month. The AICPI in January and February were 125.1 and 125, respectively, while in March it rose to 126. The AICPI in April increased to 127.7, due to the rising inflation. In May, there was a big jump of AICPI to 129.
On one-month percentage change, it increased by 0.54 per cent with respect to the previous month compared to an increase of 0.9 per cent recorded between corresponding months a year ago.
The DA is revised based on the changes in the All India Consumer Price Index (AICPI) Industrial Workers.
According to media reports, the DA for central government employees could be hiked by 4 per cent. After the hike, the DA will increase from the current 34 per cent to 38 per cent.
Currently, government employees get a DA of 34 per cent on their basic salary. If the DA hike of 4 per cent is implemented, they are going to get a 39 per cent dearness allowance on top of their basic pay. Dearness allowance (DA) is given to government employees, while dearness relief (DR) is for pensioners. The government had in March this year revised the DA, which then rose by 3 per cent to stand at 34 per cent of an employee’s basic salary.
Recently, the Chhattisgarh government raised DA for its employees. The DA has been hiked by 6 per cent to 28 per cent for employees under the 7th Pay Commission and by 15 per cent to 189 per cent for those under the 6th Pay Commission. The hikes are effective August 1, 2022, according to an official notification.
The state government employees were receiving a 22 per cent dearness allowance under the 7th Pay Commission and 174 per cent under the 6th Pay Commission since May 2022, as per the notification. The hike will benefit at least 3.8 lakh state government employees and will put an additional burden of Rs 2,160 crore per annum on the state exchequer.
DA Hike: Calculation 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.