7th Pay Commission: The Centre recently hiked by 3% the dearness allowance (DA) for serving central government employees and dearness relief (DR) for pensioners for the July-December 2024 period.
With this DA/DR revision, the allowance has hit the 53% of the basic pay level, triggering speculation that there might be a merger of DA with basic salary. The basis of this speculation is one of the instances in 2004 when DA was merged with basic pay after hitting the 50% mark.
However, the government has maintained its stance that DA will not merge with basic pay despite it breaching the 50% level. A senior government official recently said that during the 5th Pay Commission, dearness allowance got merged into the basic as the consumer price index rose by 50% over the base index used by the previous pay commission.
What was 6th Pay Commission stance on DA merger with basic pay?
However, later the 6th Pay Commission categorically stated that DA should not be merged into the basic pay even when it breaches the 50% of basic salary mark.
Also read: 7th Pay Commission: Dearness allowance hike announcement for govt employees soon | DA to be raised by THIS much
When will next DA hike be announced?
The next DA hike will be announced in March before Holi festival. However, the hike will be effective from January 2024. The Centre revises DA and DR for employees and pensioners twice a year in March and September/October every year. The revision gets effective from January and July and central government employees usually get April and October salaries with arrears of two to three months.
How is DA calculated for central government employees?
DA% = [(Average of AICPI (Base Year 2001 = 100) for the last 12 months – 115.76)/115.76] x 100
DA Calculation for Public Sector Employees:
DA% = [(Average of AICPI (Base Year 2001 = 100) for the last 3 months – 126.33)/126.33] x 100
Here, AICPI means the All-India Consumer Price Index.
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