7th Pay Commission: Central government approves 4 per cent hike in DA

Cabinet approves to increase dearness allowance by 4 per cent for all the central government employees and pensioners. The DA has been increased to 46 per cent from 42 per cent

The central government has approved the 4 per cent hike in dearness allowance (DA) for central govt employees. The decision on dearness allowance has been awaited since July. Resultantly, the DA will go up from 42 per cent to 46 per cent after the current hike.

The decision will benefit over a crore employees and pensioners. The new dearness allowance will be effective from July 1, 2023. 

The DA of employees and pensioners is worked out on the basis of the Consumer Price Index for Industrial Workers (CPI-IW), which is brought out by the Labour Bureau every month.

The decision comes in this festive season, which will be lauded as a "Diwali Gift' from the central government to its employees and pensioners.

The central government employees will get an enhanced salary from November with July to October month's arrears. 

Earlier, the DA was revised on March 24, 2023.

How will the DA hike impact the employee's salary?

All the central government employees along with pensioners will benefit from the increased DA. This has been increased by 4 per cent from 42 per cent to 46 per cent.

For example, if your basic salary is 18,000, then you used to get Rs 42 per cent DA, i.e., Rs 7,560. But hereon, with the revised DA rate, which is 46 per cent, you will get Rs 8280 as DA. This central government action will increase your monthly salary from Rs 23,898 to Rs 26,174.

Bonus for Groups C and D employees

The central government has earlier announced bonuses for Group C and non-gazetted Group B level officials, including paramilitary forces for 2022-2023. The finance ministry set a limit of Rs 7,000 for the calculation of non-productivity linked bonuses with ad hoc bonuses for central government employees.

What is Dearness Allowance and Dearness Relief?

The DA functions as a cost-of-living adjustments allowance extended to the government's committed workforce. Dearness Relief serves central government pensioners managing the escalating cost of living. The government revises the rate of DA and DR every six months.