7th Pay Commission: Cabinet Meeting on DA Hike Tomorrow? Good News Likely Soon, Here's How Much Salary Will Increase

New Delhi: Latest update on 7th Pay Commission DA hike: The Central government employees might be treated to a post-holiday celebration by the Narendra Modi administration soon. The announcement regarding the DA Hike for government employees may be made following the cabinet meeting that the Modi government is scheduled to hold on March 15.

For January 2023, the All-India CPI-IW increased by 0.5 points to 132.8. (one hundred thirty two point eight). In terms of 1-month percentage change, it climbed by 0.38 percent compared to the previous month, however 0.24 percent less change was seen between the same months a year earlier.

The All India Consumer Price Index (AICPI) numbers that the Labor Ministry releases before the end of the month may contain a signal regarding the anticipated Dearness Allowance (DA) raise, nevertheless, if the cabinet meeting next week does not address the DA problem. On March 31, 2023, a new issue of CPI-IW will be published for the month of February.

The December 2022 AICPI figures were 132.3. The AICPI index is the sole variable used to determine the daily wage for central employees. Together with the entire country, the index covered 88 locations. The AICPI is published on the final working day of each month.

The dearness allowance would rise by 3%, the media reported. As a result, from its current 38 percent, the DA will increase to 41%.

What percentage of salary will rise if the government raises the DA by 3% to 41 percent?

With a basic pay of at least Rs. 18,000

Suppose the DA was raised to 41% ($7,380/month)

Real 38% DA equals Rs 6,840 monthly

Pay increases of Rs 900 per month (Rs 7,380 minus Rs 6,840)

Salary increase: Rs 900 x 12 = Rs. 10,800

Considering a basic salary of Rs. 56,900

A 41% rise in the DA will result in a monthly pay of Rs 23,329

Actual 38% DA = Rs 21,622 per month

Increases in wages of Rs 1,707 per month (Rs 23,329 minus Rs 21,622)

Salary increase: Rs. 1,707 x 12 = Rs. 20,484

7th Pay Commission: DA increased by 4% to 38%

The Union Cabinet had authorised the distribution of an additional instalment of Dearness Allowance and Dearness Relief @ 4 percent to Central Government employees and pensioners due from July 1, 2022, based on the percentage increase in the 12-month average of the All India Consumer Price Index for the period ending June 2022. Both Central Government employees and pensioners would be entitled to enhanced amounts of Dearness Allowance and Dearness Relief, effective July 1, 2022.

Estimates indicate that this increase in Dearness Allowance for Central Government Employees will have additional budgetary implications totaling Rs. 6,591.36 billion annually and Rs. 4,394.24 billion in the fiscal year 2022–2023. (i.e. for a period of 8 months from July, 2022 to February, 2023).

Estimates indicate that this increase in Dearness Relief for Pensioners will have a major financial impact of Rs. 4,174.12 billion in the fiscal year 2022–2023 and Rs. 6,261.20 billion yearly (i.e. for a period of 8 months from July, 2022 to February, 2023).

In the fiscal year 2022–2023, the combined burden of Dearness Allowance and Dearness Relief on the exchequer would be in the neighbourhood of Rs.12,852.56 billion (i.e. for a period of 8 months from July, 2022 to February, 2023).