Due to the anticipated 4% increase in dearness allowance (DA), government employees may soon see an increase in pay. A potential increase in the DA appears to be in the cards, according to data from the All-India Consumer Price Index for the month of May. Government workers' DAs are updated twice a year, between January and July.
DA is updated based on the All-India Consumer Price Index (AICPI). The likelihood of government employees receiving a raise in deferred compensation is high at the moment because the AICPI is now running far beyond the Reserve Bank of India's tolerance level.
Retail inflation in June was 7.01 percent, exceeding the Reserve Bank of India's target range of 2 to 6 percent. According to the most recent media sources, the employees' DA will likely increase by 4%. The DA for government employees would rise to 38% if this were to occur.
In March, the Union Cabinet approved a 3% increase in DA under the 7th Pay Commission, bringing it to 34% of the basic income. 65 lakh pensioners and more than 50 lakh public employees profit from this decision.
According to recent reports in the media, the Central Government may soon handle the issue of DA arrears and government employees may also receive Rs 2 lakh in pending arrears all at once. The pay band and structure of the employee determine the amount of DA arrears.
Due to the unprecedented conditions brought on by the COVID-19 pandemic, the Center had withheld three installments of DA and DR for January 1, 2020; July 1, 2020; and January 1, 2021. The government saved roughly Rs 34,402 crore by holding back DA and DR, according to Finance Minister Nirmala Sitharaman in response to a question in the Rajya Sabha in August 2021.
What will be the base salary after the DA hike?
In 2006, the central government updated the formula used to calculate DA and DR for employees and retirees of the government.
Dearness Allowance Percentage is equal to ((Average of All-India Consumer Price Index for the last 12 months (Base Year 2001=100))/115.76x100.
Employees in the Central Public Sector: Dearness Allowance Percentage is calculated as follows: (Average of All-India Consumer Price Index (Base Year 2001=100) for the previous three months -126.33) /126.33) x 100.
