2023 is around the corner and the government has brought some good news for the central government employees ahead of the New Year. According to the big update, the Dearness Allowance (DA) of the employees is about to hike in the coming year. In addition, the existing formula of DA calculation will be replaced by a new one, as decided by the Ministry of Labor and Employment.
Reportedly, the Centre has decided to change the base year for DA hike. Keeping 2016 as the base year, a new series of Wage Rate Index (WRI-Wage Rate Index) has been released. The old series was calculated with 1963-65 as base years. As per the new calculations, base year 2016=100 under the 7th Pay Commission rules.
Notably, the DA hike of the government employees is calculated based on the current rate of DA employment and basic salary. The current rate is 12 percent for a basic salary of Rs 18,000. Hence, the calculation is DA (18000×12)/100. Further, the result is divided by 115.76 and then multiplied by 100.
However, if the basic salary of an employee is Rs 26,000, then according to the 38 percent calculation, the result of the DA will be Rs 9,880. If the expected 4 percent hike is approved this 2023, then the increase in salary with the next DA hike will come to around Rs 910 for this basic pay, the figure being increased to 42 percent.
As per the reports, the expected announcement will be made around the Holi festival in March 2023. The central government employees will have to bear tax on DA hikes with DA fully taxable under the new rules of the 7th Pay Commission.
Ms Kalinga