Central govt likely to announce DA hike under 7th Pay Commission in September

The announcement of the July DA hike is likely to be made soon for central government employees. While there hasn’t been an official confirmation regarding the announcement date, media reports suggest that the decision will likely be disclosed in September 2023.

The reason for this keen interest in the DA hike is the recent surge in retail inflation, which reached a 15-month high in July. Reports indicate that the government is contemplating increasing the DA by 3 percentage points, bringing it up to 45%. If approved, this hike will be effective July 1, 2023.

The calculation of the dearness allowance for central government employees and pensioners relies on the latest Consumer Price Index for Industrial Workers (CPI-IW), which is published monthly by the Labour Bureau.

According to Shiva Gopal Mishra, the General Secretary of the All India Railwaymen Federation, “The CPI-IW for June 2023 was released on July 31, 2023. We are demanding a four-percentage-point hike in dearness allowance. But the dearness allowance hike works out to be a little over three percentage points. The government does not factor in hiking DA beyond the decimal point. Thus, DA is likely to be increased by three percentage points to 45 percent.”

Mishra further explained that the finance ministry’s expenditure department will prepare a proposal for the DA hike, along with its financial implications. This proposal will then be presented to the Union Cabinet for approval, after which the official announcement regarding the DA hike will be made.

Currently, more than one crore central government employees and pensioners receive a 42% dearness allowance. It’s important to note that while central government employees receive DA, pensioners are granted Dearness Relief (DR). Both DA and DR are typically increased twice a year, in January and July.

The most recent DA hike occurred in March 2023, when it was raised by 4% to reach 42%. Considering the current inflation rate, various reports suggest that the upcoming DA hike may be around 3%. Central government employees are eagerly awaiting the official announcement to learn how this adjustment will impact their finances.