7th Pay Commission: DA hike of 5% expected in July; Here's how much your salary will increase, check latest update..

New Delhi: The central government is likely to provide relief to its employees and retirees at a time when India's inflation rate has consistently exceeded the Reserve Bank of India's comfort zone of 2–6%. The CPI inflation rate has already surpassed its eight-year high, and a variety of commodities are seeing rising costs. The government is anticipated to announce another DA increase for central government employees under the 7th pay commission in order to counteract the effects of inflation.

In July, the government may take into account raising the DA by up to 5%. If the claim is to be believed, central government employees will receive a DA of 39%. Government workers currently receive a DA of 34% of their base pay. They will receive a 39 percent dearness allowance in addition to their base salary if the DA raise of 5% is enacted. Government employees receive the dearness allowance (DA), whilst pensioners receive the dearness relief (DR).

Based on changes in the All India Consumer Price Index, the DA is updated (AICPI). The likelihood of government employees receiving an increase in their dearness allowance is very strong due to the high AICPI. Retail inflation for May was 7.04 percent, exceeding the RBI's target range of 2 to 6 percent.

Rumors that the government may consider a DA hike of 5% in July have been fueled by the April AICPI.

In light of the extraordinary situation brought on by the Covid-19 outbreak, the central government had withheld three payments of DA and DR for January 1, 2020, July 1, 2020, and January 1, 2021. Nirmala Sitharaman, the finance minister, stated in a written response to a query in the Rajya Sabha in August of last year that the withholding of DA and DR saved around Rs 34,402 crore.

According to a notice from the department of expenditures, following the most recent increase that went into effect in April, an employee whose basic pay is Rs 18,000 will receive a Dearness Allowance of Rs 6,120. The employee was receiving DA of Rs 5,580 at the earlier rate of 31%. This will imply that following the most recent DA hike, there has been an increase of Rs 540. The DA will be Rs 7,020 if the DA is enhanced by an additional 5%, or if the employee receives 39% DA on a basic salary of Rs 18,000 instead. This indicates that if the DA raise of 5% is applied, the salary will rise by Rs 900.