Exclusive: DA Hike For Central Govt Employees Will be Announced in Third Week of September, Says Ministry Official

7th Pay Commission Latest News Today: Here comes a big update for the Central government employees who are eagerly waiting for the dearness allowance hike. The Centre could announce the DA hike in the third week of September 2023 and this will certainly bring cheers for them.

Speaking to India.com, an official in the Ministry of Finance said, “The Central government employees could expect DA hike only in the third week of September. And this time, the Centre could announce only a 3% hike in dearness allowance as the inflation is steadily coming under control.”

DA Hike to be Effective From July 1

 He further added that once the DA hike is announced, it will be effective from July 1, 2023.

On why there will be only a 3% DA hike this time, he said it depends on factors like inflation and price rise. As the Centre is able to contain the price rise in recent months, the Central government employees could expect only 3% DA hike this time. With this, the total DA hike will increase to 45%.

Currently, over one crore central government employees and pensioners are receiving only 42% dearness allowance. While DA is granted to central government employees, dearness relief is granted to pensioners. Notably, DA and DR are hiked twice a year — January and July.

When Was DA Hiked Last Time?

The DA was hiked last time in March 2023, and it was increased by 4% to 42% by the Union Cabinet, Union I&B minister Anurag Thakur said.

“The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi has given its approval to release an additional instalment of Dearness Allowance to Central Governments employees and Dearness Relief to Pensioners with effect from 01.01.2023. The additional instalment will represent an increase of 4% over the existing rate of 38% of the Basic Pay/Pension, to compensate against price rise,” the Centre said in a statement.

How is DA Hike Calculated?

The Department of Expenditure under the Ministry of Finance calculates the dearness allowance for employees and pensioners on the basis of the latest Consumer Price Index for Industrial Workers (CPI-IW) brought out by the Labour Bureau every month. As per the latest data shared by the Centre, the All-India CPI-IW for July 2023 went up 3.3 points to 139.7.

The central government had in 2006 revised the formula to calculate the DA and DR for central government employees and pensioners.

In the recent past, several state governments, including Madhya Pradesh, Odisha, Karnataka, Jharkhand and Himachal Pradesh, increased dearness allowance for their state government employees.

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