7th Pay Commission: Central Government Employees and Pensioners to Receive 4% Increase in DA & DR

The most recent Consumer Price Index for Industrial Workers is used to compute the Daily Allowance for central government employees (CPI-IW). The CPI-IW statistics is released each month by the Labor Bureau, a division of the Labor Ministry. The dearness allowance for central government employees and pensioners is determined by a predetermined formula.

7th CPC DA% = [{12 month average of AICPI-IW (Base Year 2001=100) for the last 12 months – 261.42}/261.42x100]

The linking factor for the conversion of base year 2016=100 to base year 2010=100 is 2.88.

DA%=(372.20-261.42)/261.42x100 = 42.37

The table shows that the average CPI-IW for the previous 12 months was 372.2. According to the algorithm, DA equals 42.37 percent. therefore, the Union administration is expected to raise the dearness allowance to 42%. (ignoring the decimal points).

Central government employees currently receive a 38% dearness allowance, while pensioners receive a 38% dearness relief. On September 28, 2022, the federal government announced the final DA rise. It became operative on July 1st, 2022.

Hence, the expected growth in DA and DR will be roughly 4%, bringing the total DA and DR to about 42%. This price increase will take effect on January 1, 2023.

The table shows that the average CPI-IW for the previous 12 months was 372.2. According to the algorithm, DA equals 42.37 percent. therefore, the Union administration is expected to raise the dearness allowance to 42%. (ignoring the decimal points).

Central government employees currently receive a 38% dearness allowance, while pensioners receive a 38% dearness relief. On September 28, 2022, the federal government announced the final DA rise. It became operative on July 1st, 2022

DA is determined as a percentage of the base pay. Dearness Allowance and Dearness Relief are provided to all government employees and retirees. A rise in DA raises central government employees' take-home pay. A federal government employee, for instance, receives a basic wage of Rs 25,500 per month.

His dearness allowance was Rs 9,690, or 38%. Now, if the DA increases to 42%, his DA will increase to Rs 10,710. His pay would therefore increase by Rs 10,710 - Rs 9,690 = Rs 1,020 as a result of the most recent increment.

Central government retirees are eligible for dearness relief. For employees of the central government, it is comparable to DA. In the near future, dearness relief is likewise projected to rise by 4%. Central government pensioners will have an increase in their monthly pensions due to an increase in DR.

Consider a retiree from the central government who receives a monthly basic pension of Rs. 35,400. With a 38% cost-of-living adjustment, the pensioner now receives Rs 13,452. He will receive Rs 14,868 per month if his DR increases to 42%. His monthly pension will therefore increase by Rs. 1416.

Keep in mind that starting on January 1, 2023, these changes will be retroactively applied to pensioners and workers of the central government.