7th Pay Commission: EXPLAINED | How Centre does Dearness Allowance (DA), Dearness Relief (DR), TA calculation for central government employees

7th Pay Commission: The central government employees are eagerly waiting for their Dearness Allowance (DA) announcement for January to June 2021 period. After the announcement of AICPI (All India consumer Price Index), they are more eager to know their DA hike as speculation is rife that the central government will announce at least 4 per cent DA for the central government servants. Since, central government employees' Travel Allowance (TA) would also automatically rise once the DA is announced, they expect a huge monthly salary hike post-DA announcement. However, for that they will have to wait for the DA restoration as the center has frozen it at the old rates of DA till June 2021.

Speaking on how the central government decides to announce DA for central government employees; Harishankar Tiwari of AG Brotherhood said, "There is no chance of Centre announcing more than 4 per cent DA for the central government employees as the December 2020 AICPI number is 342 means the average AICPI for the entire 2020 as year stands at 335. That means the December 2020 AICP has gone down by 3 points leading to 4 (3+1) per cent DA hike for the central government employees."

On how the speculation for 4 per cent DA started to create buzz among the central government employees Tiwari said, "If there had been 8 points down in inflation, then the DA hike could have stood at 3 per cent while if there had been 24 points rise in December 2020 inflation, in that case the DA could have become 5 per cent. In one month, we can't expect such a deviation in inflation. Hence, the central government and some media professionals started to speculate the probable DA hike on the basis of this assumption."

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For information to the central government employees, the DA hike has direct connection with the TA of central government employees too. A central government's TA gets increased in sync with its DA hike. So, the central government employees can expect the same 4 per cent rise in their TA on the basis of this Da calculation.

Like central government employees, retired central government employees or central government pensioners also get Dearness Relief (DR). It also increases in sync with the DA announced. So, central government pensioners can also expect their DR hike by 4 per cent as the calculation done by Harishankar Tiwari suggests.