7th Pay Commission: 5% DA Hike Likely to be Announced in July with NEW FORMULA! Know How to Calculate Salary Here

For approximately 48 lakh central government employees and 67 lakh retirees, there is good news. According to media sources, the Centre will likely increase its dearness allowance (DA) by another 5% starting in July.

Last time, the DA for government employees was hiked by 3% to 34% with effect from January 1, 2022. With inflation in the country reaching new highs, the DA increase will provide some relief to government employees. According to media reports, the DA raise will be around 5%, with the All-India Consumer Price Index (AICPI) at roughly 127 points. The DA is updated twice a year, once in January and once in July.

In April, CPI-based retail inflation was at an all-time high. After a long gap, the Centre increased DA and dearness relief (DR) for central government employees and retirees to 28 percent and 17 percent, respectively, in July 2021. Government employees receive DA, whereas retirees receive dearness relief (DR).

Central government employees received a 3% increase in dearness allowance in October 2021. Then, in July 2021, the DA for them was raised to 31%. In January, the AICPI was 125.1, but by February, it had dipped to 125. In March, however, the Index increased by one point to 126 points. In April, the AICPI increased to 127.7 points.

The data for May and June will be carefully examined now. According to media reports, if the results in those months continue over 127, the DA could be raised by 5%.

How to Calculate Basic Salary?

DA must be based on the employee's basic salary when calculating salary under the 7th Pay Commission.

If a central employee's minimal basic wage is Rs 25,000, his DA will be calculated at 34 percent of that amount. The total will be Rs 8500, or 34% of Rs 25,000. This is an illustration. Those with the rest of the wage structure can calculate it using their basic salary as well.