DA Hike: The central government in a cabinet meeting today is likely to announce an increase in the dearness allowance (DA) of central government employees. The question is whether it will be 3 per cent of 4 per cent. Read the write-up further to know it. 

Will central government employees get increased salaries?

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To fight inflation, the central government increases DA from time to time. Usually, it is revised in January and July.

However, this time, the increase in DA may be announced after some time.

After this, the new rate of allowance will be added to the salary in October itself.

The cabinet meeting to decide the DA increase will start at 10 o'clock on Wednesday (October 18). 

3 or 4%, how much will DA increase?

DA for central government employees is calculated on the basis of the latest Consumer Price Index for Industrial Workers (CPI-IW).

There is a fixed formula for calculating dearness allowance of central government employees and pensioners.

7th CPC DA% = [{Average of AICPI-IW (Base Year 2001=100) for the last 12 months – 261.42}/261.42x100]
=[{382.32-261.42}/261.42x100]= 46.24

As you can see from the table, the average CPI-IW for the last 12 months would be 382.32. According to the formula, DA will be 46.24%.

As per the prescribed formula, the current DA is available at 42 per cent (DA 42 per cent is applicable from January 1, 2023).

In such a situation, according to the new calculation, the increase in DA from July 1, 2023, will be 46.24 per cent-42 per cent= 4.24 per cent.

Now, because the government does not make payments in decimal, there will be an increase of only 4 percent in DA.

If sources are to be believed, the central government will approve 4 per cent increase in DA.

When will DA be implemented?

At present, DA and relief are being paid to central employees and pensioners at the rate of 42 percent.

In such a situation, after revision, DA will be 46 per cent (after an increase of 4 per cent).

The increase in DA will be implemented from July 1, 2023.

How much will the salary increase?

DA is calculated as a part of the basic salary of central government employees.

This will be inflation relief for central government pensioners.

Therefore, when DA increases, the salary of central government employees increases.

Let us assume that if the basic salary of an employee is Rs 36,500 per month.

In such a situation, with 42 per cent DA, they would be getting Rs 15,330.

But, after the increase of 4 per cent, DA will be 46 per cent and they will get Rs 16,790 every month.

In such a situation, the total income of the central employee will increase by Rs 16,425-15,330 = Rs 1,460/month.

Arrears will also be paid

If the Centre announces an increase in DA today, then along with the salary, the employees will get arrears.

In this case, they will also receive the arrears of July, August, and September.

For pensioners, dearness relief will also increase equal to DA.

They will also get additional payment of 4 per cent and will get arrears in pension starting July.