7th Pay Commission: Good News! DA Hiked by 3% for Central Govt Employees, Check How much Will Your Salary Increase?

DA Latest News Today 2022: As mentioned by Krishi Jagran in the previous articles, the cabinet has accepted a plan to raise the dearness allowance (DA) for central government employees and retirees by 3% to 34% of basic salary, up from 31% previously, effective from January 1, 2022 before the closing of the financial year 2021-22.

The increase in DA is by an accepted formula (All India Consumer Price Index for the months of 2021) based on the Centre’s 7th Pay Commission recommendations.

The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the payment of an additional installment of dearness allowance (DA) to central government employees and dearness relief (DR) to pensioners beginning January 1, 2019.

This implies a 3% increase over the current rate of 31% of basic pay/pension to compensate for the increase in costs.

This will benefit about 47.68 lakh central government employees and 68.62 lakh pensioners. It will apply to civilian employees and those employed in defense services.

What is Dearness Allowance?

Dearness Allowance is a component of government employees' and retirees' salaries that helps to balance the effects of inflation. The effective compensation of government personnel is updated on a regular basis to keep up with rising inflation rates. The Centre revises DA twice a year, between January and July, in order to combat inflation. It is important to remember that Dearness Allowance differs from employee to employee depending on whether they work in the urban, semi-urban, or rural sectors.

DA Calculation: How much will the Salary Increase?

If a central government employee gets Rs 18,000 per month. The Dearness Allowance in his salary will increase by 3 percent. With 34 percent DA, he or she will witness a jump of Rs 6,120 (18000X34/100) in the monthly salary.

It must be noted that the dearness allowance is linked to the basic salary. So, a hike in DA will also increase the monthly provident fund (PF) and gratuity amount of the central government employees.

After the revision in Dearness Allowance, the monthly contribution to Provident Fund, gratuity, Travel Allowance will also go up for the central government employees.