7th Pay Commission Update: Government’s Huge Change in DA Calculation; Check Now

After announcing the Diwali gift to the central government employees with an increase in the Dearness Allowance (DA), HRA & TA, the center has this week made a big change in the calculation of Dearness Allowance (DA). The changes were announced by the Ministry of Labor & Employment. 

Latest Updates on DA Calculation

According to the latest update, the new series of a Wage Rate Index (WRI) with the base year 2016 = 100 will replace the old series with the base year 1963 65 = 100.

In the year 2016, the base year for a Dearness Allowance (DA) was revised.  A new series of Wage Rate Indexes has been introduced by the Centre (WRI-Wage Rate Index). According to the updates from Labor Ministry, the new WRI series, with the base year of 1963-65. That is, the manner of calculating the Dearness Allowance (DA) has completely changed. 

Centre Changed the Base Year:

It must be noted that the Centre periodically revises the base year for the major economic metrics based on the inflation data. The revision is based on the economic developments that are occurring, as well as the wage patterns of employees.

The central government employees need to know that the National Statistical Commission altered the base year of the Wage Rate Index from 1963-65 to 2016 in order to broaden scope & improve the index’s efficiency, as recommended by the International Labor Organization (ILO).

How to Calculate Dearness Allowance (DA)?

The Dearness Allowance (DA) of the central government employees is usually revised twice a year, that is between January & July. The Dearness Allowance is calculated by multiplying the current rate of the Dearness Allowance by the base wage.