This hike was decided as per the recommendations of the 7th Pay Commission, which is responsible for recommending the revision of pay and pension structure for Central Government employees and pensioners.
DA and DR are provided to employees and pensioners, respectively, in order to compensate them for the rising cost of living. With the latest hike, the DA/DR rates for Central Government employees and pensioners will increase to 42% of their basic pay/pension. This is great news for nearly 47.58 lakh employees and 69.76 lakh pensioners who will benefit from this move.
To better understand the impact of this hike, let's take the example of an employee whose basic salary is Rs 31,400. Prior to the hike, he was receiving a DA component of Rs 11,932 at the applicable rate of 38%. With the DA rate now jumping to 42%, the employee will now receive a DA component of Rs 13,188.
This is an increase of Rs 1,256 or 10.5% in his DA component. Similarly, for pensioners, if the basic pension is Rs 25,200, the DR component will increase from Rs 9,576 to Rs 10,584, resulting in a 10.5% increase in the DR component.
The DA/DR hike will be effective from January 1, 2023, and will represent an increase of 4% over the existing rate of 38% of the basic pay/pension. This news is undoubtedly a welcome relief for Central Government employees and pensioners who have been grappling with the increasing cost of living.
