7th Pay Commission : Holi loading the central employees and pensioners with a double whammy of happiness this time. Before Holi which will be celebrated on March 14, an announcement by the government on an increase in the dearness allowance (DA) could be expected. For millions of central employees and pensioners who are suffering under the pressure of increasing inflation, this comes as a relief. Reliable sources within the finance ministry suggest that this time DA may increase by 2 to 4 percent, which would turn out to be quite a significant addition to employees’ monthly income.
Procedure For Increasing Dearness Allowance
The Seventh Pay Commission prescribes alterations every year in dearness allowance; the changes are made to take effect in January and July. The first part of the increase which was due to the beginning of January has already been implemented in early 2025. The second cut is expected to be made public in March 2025. So far, there has been no official confirmation on the matter from the government, although experts feel that the impending rise in costs will prove favorable to this increase.
How Is Dearness Allowance Calculated
Dearness allowance is determined on the basis of All India Consumer Price Index (AICPI). The central government fixes the rates of DA and DR (dearness relief) keeping in mind the average AICPI data of the last 12 months. The formula for calculating this for central government employees is as follows: DA (%) = ((Average of AICPI of last 12 months – 115.76)/115.76) × 100. In the case of public sector employees, it is calculated as follows: DA (%) = ((Average of AICPI of last 3 months – 126.33)/126.33) × 100.
How Much Will The Salary Increase
It is said that an increase of anywhere between 2-4 percent in dearness allowance will directly benefit the salary of central employees. For example, if the basic salary of an employee is Rs 18,000 and currently the dearness allowance is 53 percent, dearness allowance will be Rs. 9,540. Now, with an increase of 2 percent in DA, the new DA would become 55 percent, which means Rs 9,900, giving an additional benefit of Rs 360 per month. With an increase of 3 percent in DA, DA would now go to 56 percent, which translates to Rs 10,080 in a benefit of Rs 540 per month.
Pensioners Will Benefit As Well
The increase in dearness allowance would benefit all current employees and the pensioners. The DR calculated for pensioners follows a similar calculation to DA. If DA goes up by 2% to 4%, DR will go up by the same amount. This will further increase the pension, making it a better friend in fighting inflationary pressures.
Effects On Financial Condition
The increase in dearness allowance would account for the extra income in a given month for employees and pensioners, so that some relief may be experienced based on their overall economic situation. Under a barrage of inflation and rising productivity, the grant certainly provides some form of succor. Added income will help them in coping with their expenditures and configuration of family needs.
Also Read: 8th Pay Commission: Govt Announces Salary Hike For Employees, Check Details!