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7th Pay Commission: Good News for Central Govt Employees! 3-4% DA Hike Expected from July 1

7th Pay Commission: Despite a drop in retail inflation to 5.66% in March 2023, which is below the Reserve Bank of India's upper tolerance limit of 6%, it still exceeds the RBI's target of 4%.

Yash Saxena
Good News for Central Govt Employees! 3-4% DA Hike Expected from July 1
Good News for Central Govt Employees! 3-4% DA Hike Expected from July 1

Central government employees witnessed a 4% hike in their dearness allowance (DA) last month, which came into effect on January 1, 2023, increasing the DA to 42%. The previous hike of 4% was implemented in September 2022, which came into effect in July last year.

Sources suggest that the dearness allowance (DA) is expected to see another surge of 3-4% for the 7th Pay Commission, which will be effective from July. As per recent statistics, there are around 47.58 lakh central government employees and 69.76 lakh pensioners.

Dearness allowance (DA) and dearness relief (DR) are both revised twice a year, between January and July. DA is provided to government employees, while DR is provided to retirees. The DA is calculated based on an employee's basic pay, while the DR is calculated based on an employee's basic pension.

The government employs a specific formula to determine the revision of DA and DR for employees. Here is the formula:

The formula used by the Central Government to calculate the Dearness Allowance Percentage for employees is ((Average of the All-India Consumer Price Index (Base Year 2001=100) for the previous 12 months -115.76)/115.76)x100. For Central Government employees, the formula is modified to use the average of the All-India Consumer Price Index for the previous three months, which is ((Average of the All-India Consumer Price Index (Base Year 2001=100) for the previous three months -126.33)/126.33)x100.

Jharkhand's state cabinet, led by Chief Minister Hemant Soren, announced on Thursday that the dearness allowance for state government employees would be raised from 34% to 42%.

The augmentation in DA adheres to the recommended formula based on the 7th Central Pay Commission's guidelines.

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