Central government employees are expected to get the benefit of a 3-4 percent increase in dearness allowance this month. This increase may be announced in the third week of September 2024. Dearness allowance was increased by 4 percent in March 2024. The central government provides dearness allowance and relief for employees and pensioners.
7th Pay Commission: Central government employees may get a hike in dearness allowance (DA) by the end of this month. According to sources, the government may announce a 3-4% DA hike in the third week of September 2024. Earlier in March 2024, the government had increased the DA by 4%. This made it 50% of the basic salary. This is the second big news related to the benefits of central employees in recent times. Recently, the government had announced the launch of the Unified Pension Scheme (UPS). The central government gives DA and DR to its employees and pensioners to give relief from inflation. DA is given to central employees, while DR is given to pensioners. DA and DR change every year in January and July.
Recently, during the monsoon session of Parliament, Union Minister of State for Finance Pankaj Chaudhary had explained why three installments of DA / DR (due from January 1, 2020, July 1, 2020 and January 1, 2021) were stopped during the Corona epidemic. He had said that this decision was taken to reduce the financial pressure on the government during the economic crisis caused by the epidemic.
Demand for formation of Eighth Pay Commission
Many central government employee unions are demanding the formation of the Eighth Pay Commission. However, the government is not in the mood to take any such step at the moment. In a written reply in the Rajya Sabha on July 30, Union Minister of State for Finance Pankaj Chaudhary had said that two applications were received for the formation of the Eighth Central Pay Commission in June 2024. But, the government is not considering it yet. The Seventh Pay Commission was constituted in February 2014. Its recommendations came into effect from January 1, 2016. The government constitutes a pay commission every 10 years to review the salaries of employees.
How is DA calculated?
The increase in DA and DR is calculated based on the percentage increase in the 12-month average of the All India Consumer Price Index (CPI-IW) for industrial workers. However, the government revises these allowances every year on January 1 and July 1. But, official announcements usually happen in March and September/October. In 2006, the central government revised the formula for calculating DA and DR for government employees and pensioners.
DA percentage for Central Government employees is calculated as follows:
Dearness Allowance Percentage = ((Average of All India CPI for last 12 months (Base Year 2001=100) – 115.76) / 115.76) x 100
For Central Public Sector employees, here is the formula:
Dearness Allowance Percentage = ((Average of All India CPI for last 3 months (Base Year 2001=100) – 126.33) / 126.33) x 100
