7th Pay Commission: New Formula Introduced for Dearness Allowance? Check Latest Update

Early in the new year, central government employees are probably in for a pleasant surprise. There is a good chance that the 2023 Dearness Allowance (DA) boost will be better than the 2022 hike from January.

The DA rate for central government employees increased by 3% in January 2022, from 31% to 34 percent. The second boost in 2022 raised DA by 4%, bringing the whole percentage to 38%.

According to the most recent media sources, the first DA hike in 2023 will probably mirror the 4 percent amount from the announcement around Diwali 2022. According to the 7th Pay Commission's regulations, this would mean that the DA rate for employees of the central government might increase to 42%. 48 lakh employees and 68 lakh pensioners will experience great relief from such a boost in the form of Dearness Relief (DR).

The January DA increase, which will probably be publicly announced in March 2023, was expected to be between 3 and 5 percent. However, the current estimate is 4 percent, according to a recent report.

New Formula for DA Calculation:

There has been a significant change prior to the DA hikes that will follow in the new year. The Ministry of Labor and Employment plans to replace the current DA calculation formula with a new one.

The base year for the DA rise has been changed by the new formula. In accordance with the guidelines of the 7th Pay Commission, the government has produced a new series of the Wage Rate Index (WRI-Wage Rate Index) with a revised base year.