7th Pay Commission: Change in base year, how will it impact Dearness Allowance?

Change in base year also implies that now the method of DA calculation will change, under which the employees may get more benefits.

New Delhi: 7th Pay Commission update --The government had in October last year hiked the Dearness Allowance to 31 percent while in the month of November the central government  made base revision of Wage Rate Index (WRI) to 2016=100 from base 1963-65=100.

That also implies that now the method of DA calculation will change, under which the employees may get more benefits. The new series of Wage Rate Index i.e. 2016=100 replaces the old series (1963-65=100) which is almost six decades old, has increased the scope and coverage in terms of number of  industries, sample size, occupations under selected industries, weightage of industries etc.

The New WRI Series with base 2016=100 would be compiled twice a year on point-to-point half yearly basis, as on 1st January and 1st July of every year. 

Dearness Allowance is calculated by multiplying it by the basic salary. As per the calculation of Dearness Allowance, the government keeps changing the DA after every 6 months or so, which in result increases the salary of the employees so as to tackle inflation. In October last year, DA was increased from 28 percent to 31 percent. 

After hike in DA to 31, now the employees are expecting to get a further raise of 3 percent, thus taking the DA at 34 percent.

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