7th Pay Commission Update: DA-DR To Increase By 4%
DA and DR is revised twice a year- January and July. The 7th Pay Commission DA updates have been announced recently.
What is DA-DR?
Dearness allowance (DA) is given to government and private sector employees as well as pensioners to aide their cost of living by providing money for those who are dependent on them. DA was first introduced in India in 1972. After this, the Central government started giving dearness allowance to all the government employees. DR is dearness relief, which is meant for the pensioners previously in the service. DA and DR is revised twice a year- January and July. The 7th Pay Commission DA updates have been announced recently.
Why is DA revision important?
Dearness allowance is an extra amount of money the employees get on top of their basic pay. This means that an increase in DA directly increases their salary. The government’s decision regarding DA update for this year was announced quite late.
As per expectations, the DA was increased by 4% to combat the rising inflation.
What are the changes in the DA-DR?
DA and DR are revised on the basis of retail-inflation industrial workers. The retail inflation for industrial workers stood at 6.16 per cent in June 2022, as compared to 6.97 per cent in May 2022 and 5.57 per cent in June 2021. This was because of the lower prices of food and fuel. The all-India CPI-IW (Consumer Price Index For Industrial Workers) for June 2022 witnessed an increase by 0.2 points and came in at 129.2 points. The CPI-IW in May was 129 points.
The government has announced an increase of 4% in the DA update of central employees. After the increase of 4% in DA, the total dearness allowance of central employees has gone up from 34 to 38 per cent. This decision of the government will benefit more than 1 crore central employees and pensioners.
This revised dearness allowance will be reflected in the salary of September 2022. However, the increased DA has been implemented from the month of July, which means the arrears for the month of July and August will also be given.
Calculation on maximum basic salary
- Basic salary of the employee- Rs 56,900
- New Dearness Allowance (38%)- Rs 21,622/month
- Increase after DA update- Rs 2260/month
- Increase in annual salary – Rs 27,120
Calculation on minimum basic salary
- Basic salary of the employee- Rs 18,000
- New Dearness Allowance (38%)- Rs.6840/month
- Increase after DA update- Rs.1080/month
- Increase in annual salary- Rs 8640