DA Hike seventh Pay Commission: Even because the inflation is excessive and stays above the RBI’s consolation zone of 2-6 per cent, the central authorities is more likely to improve the dearness allowance for its workers by 5 per cent to offer them respite from excessive value ranges within the economic system, in keeping with media reviews. The dearness allowance (DA) is about to be elevated subsequent month as it’s revised twice a yr — January and July.
The DA is revised primarily based on the modifications within the All India Consumer Price Index (AICPI). Now, because the AICPI is prevailing excessive, the probabilities of authorities workers getting a elevate in dearness allowance can be excessive. The retail inflation in May stood at 7.04 per cent, which is above the RBI’s consolation degree of 2-6 per cent.
The Union Cabinet in March accredited to extend 3 per cent in dearness allowance (DA) beneath the seventh Pay Commission, thus taking the DA to 34 per cent of the essential earnings. Over 50 lakh authorities workers and 65 lakh pensioners are getting revenue from this transfer.
“The Union Cabinet chaired by the Prime Minister, Narendra Modi, has given its approval to release an additional installation of dearness allowance (DA) to central government employees and Dearness Relief (DR) to pensioners wef January 1, 2022, representing an increase of 3 per cent over the existing rate of 31 per cent of the basic pay/ pension, to compensate for the price rise,” the Prime Minister’s Office had stated in an announcement.
Now, after one other 5 per cent hike, the dearness allowance for the federal government workers will improve to 39 per cent.
According to reviews, the difficulty of 18-month DA arrears fee from January 2020 to June 2021 might also be addressed quickly and the workers of the central authorities might also obtain Rs 2 lakh in pending arrears in a single go. The quantity of DA arrears is set by the workers’ pay band and construction.
The central authorities had held again three installations of DA and DR for January 1, 2020; July 1, 2020; and January 1, 2021, in view of the unprecedented scenario which arose as a result of COVID-19 pandemic. Finance Minister Nirmala Sitharaman has stated the holding again of DA and DR saved about Rs 34,402 crore, in a written reply to a question within the Rajya Sabha in August final yr.
Dearness allowance is given to authorities workers, whereas the dearness reduction is for pensioners.
How is DA beneath seventh Pay Commission Calculated?
In 2006, the central authorities had revised the method to calculate the DA and DR for central authorities workers and pensioners.
Dearness Allowance Percentage = ((Average of All-India Consumer Price Index (Base Year 2001=100) for the previous 12 months -115.76)/115.76)x100.
For Central public sector workers: Dearness Allowance Percentage = ((Average of All-India Consumer Price Index (Base Year 2001=100) for the previous 3 months -126.33)/126.33)x100.