7th Pay Commission: Union Cabinet Approves 3% DA Hike, Official Announcement Soon

7th Pay Commission DA Hike: Central government employees and pensioners have got a Diwali bonanza from the government as the Union Cabinet on Wednesday approved a 3 per cent hike in dearness allowance (DA) and dearness relief (DR), CNBC-Awaaz has reported citing sources. The official announcement will be made by Information & Broadcasting Minister Ashwini Vaishnaw later during the day.

After the announcement, the DA will increase from 50 per cent to 53 per cent of the basic pay.

After the 3% DA hike, salary of the entry-level central government employee, who has a basic salary of around Rs 18,000 per month, will increase in the range of Rs 540 per month, effective from July 1, 2024.

On September 30, the Confederation of Central Government Employees and Workers wrote a letter to Finance Minister Nirmala Sitharaman expressing concerns over a delay in the DA/DR hike announcement.

In the letter, the confederation’s general secretary S B Yadav said, “There is discontent among employees and pensioners due to the delay in the announcement of DA/ DR.”

The letter added that Durga Puja festival is approaching and the PLB (performance-linked bonus) and adhoc bonus too are to be declared.

DA is given to government employees, while DR is given to pensioners. DA and DR are hiked twice a year — January and July. Currently, over one crore central government employees and pensioners are getting a 50 per cent dearness allowance.

In the last hike in March 2024, the central government had raised dearness allowance by 4 per cent to 50 per cent of the basic pay. The government also increased dearness relief (DR) by 4 per cent.

How Does Govt Decide on the DA Hike?

The DA and DR hike is decided based on the percentage increase in 12 monthly average of the All India Consumer Price Index (AICPI) for the period ending June 2022. Though the central government revises the allowances on January 1 and July 1 every year, the decision is generally announced in March and September.

In 2006, the central government had revised the formula to calculate the DA and DR for central government employees and pensioners.

Dearness Allowance Percentage = ((Average of All-India Consumer Price Index (Base Year 2001=100) for the past 12 months -115.76)/115.76)x100.

For Central public sector employees: Dearness Allowance Percentage = ((Average of All-India Consumer Price Index (Base Year 2001=100) for the past 3 months -126.33)/126.33)x100.