7th Pay Commission: Central government employees likely to get DA hike

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NEW DELHI: In a move that may lead to a hike in salaries of central government employees before Diwali, the Union government is planning to change the base year for the consumer price index for industrial workers (CPI-IW). 

If everything goes well, the government will make its base year 2016, thus paving the way for a possible hike in Dearness Allowance (DA) of central government employees.

The decision will benefit at least 48 lakh central government employees. It is also being said that the central government can release details of the change in the base year of the Consumer Price Index (CPI-IW) on October 21.

Although, the government has postponed the increase in the Dearness Allowance of central employees due to coronavirus infection. At present, the central employees are entitled to the Dearness Allowance at the rate of 17 per cent.

In order to stimulate consumer demand in the economy, the government had recently gifted Diwali prepaid card to central employees. The prepaid card, which offers an interest free loan of Rs 10,000 to central government employees, can be used until March 31, 2021.

The Consumer Price Index (CPI) is a measure of the aggregate price level in an economy. The CPI consists of a bundle of commonly purchased goods and services. In addition to measure the retail inflation in the economy, it is also used to calculate the Dearness Allowance of employees.