• By Vivek Raj
  • Sat, 03 Aug 2024 03:10 PM (IST)
  • Source:JND
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Central Govt Employees Hike: The central government is expected to announce a dearness allowance (DA) hike of 3 to 4 per cent for its employees in September, effective from July 1, 2024. Sources indicate that while a 3 per cent increase is confirmed, the final adjustment could reach up to 4 per cent depending on inflation trends.

At present, the dearness allowance stands at 50 per cent of the basic pay. There have been discussions about merging the DA with the basic pay under the 7th Pay Commission, but this is unlikely if the DA exceeds 50 per cent, which has already happened. Instead, provisions for increasing other allowances such as House Rent Allowance (HRA) will be considered, as reported by News 18 citing sources.

In March 2024, the central government increased the dearness allowance by 4 per cent to 50 per cent of the basic pay. Additionally, dearness relief (DR) for pensioners was also raised by 4 percent. DA and DR adjustments occur twice a year, with effect from January and July.

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The Confederation of Central Govt Employees and Workers has urged for the formation of the 8th Pay Commission and restoration of the old pension scheme ahead of Budget 2024. However, Minister of State for Finance Pankaj Chaudhary stated in the Rajya Sabha on July 30 that there are no current proposals for the 8th Pay Commission.

The 7th Pay Commission was established in February 2014 and its recommendations took effect from January 1, 2016.

How DA Is Calculated:

The DA and DR hikes are determined based on the percentage increase in the 12-month average of the All-India Consumer Price Index for Industrial Workers (CPI-IW). The formula used is:

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For Government Employees:
DA Percentage = ((Average of CPI-IW for the past 12 months - 115.76) / 115.76) x 100

For Central Public Sector Employees:
DA Percentage = ((Average of CPI-IW for the past 3 months - 126.33) / 126.33) x 100

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