7th Pay Commission: How Much Salary Increase Will Central Government Employees Get? The Centre has announced a 4% DA increase

The Union Cabinet authorized a 4% increase in dearness allowance to 46% of the base wage on Wednesday, providing central government workers with a much-anticipated treat. The 4% DA increase will take effect on July 1, 2023, and it will benefit more than one crore workers and pensioners in the federal government.

Anurag Thakur, Minister of Information and Broadcasting, gave a briefing on today’s Cabinet decisions, stating that “Dearness Allowance for Central Government Employees and Dearness Relief for Pensioners were risen by 4%, beginning July 1, this year. From 42 percent previously, the DA has now grown to 46 percent.

Additionally, the government has boosted dearness relief (DR) by 4%. Government workers get DA, whilst retirees receive DR. In January and July of each year, DA and DR are raised.

“This (4% DA hike) increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission,” the finance ministry said in a statement.

Additionally, it said that the total effect of DA and DR on the exchequer will be Rs 12,857 crore annually. About 48.67 lakh Central Government workers and 67.95 lakh pensioners would profit from this.

How much will central government employees’ salaries increase?

What is the expected amount of the pay increase for central government workers given the administration’s announcement of a 4% DA hike? Suppose someone makes Rs 50,000 a month in salary, with Rs 15,000 serving as basic income. Currently, he or she receives Rs. 6,300, or 42% of the base salary. However, with the 4% increase, the employee would now get Rs 6,900 per month, an increase of Rs 600 from the previous Rs 6,300. As a result, if a person makes Rs 50,000 per month and receives Rs 15,000 in basic pay, his or her income will increase by Rs 600 per month.

The government raised the dearness allowance and dearness relief by 4% to 42% with the last DA rise in March 2023.

Recently, a number of state governments raised the dearness allowance for their state government workers, including those in Madhya Pradesh, Odisha, Karnataka, Jharkhand, and Himachal Pradesh.

How Does the Government Determine DA Hikes?

The percentage rise in the 12-month average of the All India Consumer Price Index (AICPI) for the period ending June 2022 is used to determine the DA and DR increases. Despite the fact that the federal government adjusts the allowances twice a year on January 1 and July 1, the decision is often made public in March and September.

The formula used by the central government to determine the DA and DR for central government workers and pensioners was changed in 2006.

Dearness Allowance Percentage is equal to ((Average of All-India Consumer Price Index for the last 12 months (Base Year 2001=100))/115.76×100.

Employees in the Central Public Sector: Dearness Allowance Percentage is calculated as follows: ((Average of All-India Consumer Price Index (Base Year 2001=100) for the previous three months -126.33)/126.33)x100.