th Pay Commission: Here is good news for nearly 1 crore employees and pensioners of the central and state government. These employees may soon get three per cent dearness allowance from January 1, 2019, Praygraj based AG Office Brotherhood and ex-Assistant Secretary-General of All India Audit and Accounts Association, Harishankar Tiwari told Zeebiz Online today. According to the calculations made on the basis of Consumer Price Index, the DA has been set to move closer to three per cent. This is the first time after the implementation of 7th pay commission on January 1, 2016, when dearness allowance may increase by 3 per cent.

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According to experts calculating DA, dearness allowance may stay at 3% or more from 2019. If the consumer price index of December month rises to 6 per cent, then the employees may get up to 4 per cent DA. 

If there is a deficit of 26 points in the consumer price index, then the DA will be 2 per cent. But the likelihood of such a decrease in the Consumer Price Index is unlikely. It is believed that employees can get DA closer to 3%.

What is DA or Dearness Allowance

Dearness Allowance is such money which is given to improve the living condition of the government employees of the country, keeping inflation in mind.

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Only India, Pakistan and Bangladesh are the countries in the world where government employees are given such allowance. This money is given so that even amid rising inflation, the level of employee's living condition doesn't worsen because of lack of money. DA is given to government employees, public sector enterprises' employees and pensioners.
What 7th Pay Commission said

As per the 7th Pay Commission report, the Dearness Allowance (DA) is paid to Central Government employees "to adjust the cost of living and to protect their Basic Pay from erosion in the real value on account of inflation."

Presently, DA is based on the All India Consumer Price Index (Industrial Workers). 

The 7th pay panel had decided to continue with the formula for DA calculation adopted by the VI CPC. 

"The VI CPC had recommended that the National Statistical Commission may be asked to explore the possibility of a specific survey covering government employees exclusively, so as to construct a consumption basked representative of government employees and formulate a separate index. This has, however, not been done," the report said.

"Keeping in mind that the present formulation of DA has worked well over the years, and there are no demands for its alteration, the Commission recommends the continuance of the existing formula and methodology for calculating the Dearness Allowance," it added.