7th CPC: 5% DA hike likely in June, will these 4 allowances also increase?

New Delhi: 7th Pay Commission Latest update-- As the reports on further DA hike is gaining momentum, media reports are saying that government might also decide on hiking 4 other allowances for the central government employees.

Lakhs of central government employees waiting for announcement on hike in Dearness Allowance (DA) have a brighter hope, thanks to the recent All-India CPI-IW data. The AICP Index, crucial factor in determining the DA, for the month of April points at the probability of increase in the DA of the central government. Government may bring in some more good news for the employees in the month of July. Now, if latest media reports are to be believed, there could be a five percent hike in DA in July. This means the total DA could reach upo 39 percent. The Dearness Allowance of central government employees is revised twice a year. The first is given from January to June, while the second comes from July to December.

Amidst the wide speculation on a probable hike in DA in the month of July, media reports are also rife that 4 other allowances that are decided based on the DA level, may also increase. Here's the list.  

1. The DA is proportional to the base wage. As a result, a raise in DA will also raise central government employees' monthly provident fund (PF)

2. The gratuity amounts of the employees will also be increased due to the hike in DA.

3. The hike in dearness allowance has also cleared the path for hike in Travel/Transport Allowance and City Allowance of the employees. 

4. There have also been speculations in the media that the government is contemplating a hike in the HRA as the DA has been hiked.

The All-India CPI-IW for April, 2022 increased by 1.7 points and stood at 127.7 (one hundred twenty seven point seven). On 1-month percentage change, it increased by 1.35 per cent with respect to previous month compared to an increase of 0.42 per cent recorded between corresponding months a year ago, showed a Ministry of Labour & Employment data. The April AICP Index has fuelled further speculation that DA could be hiked by upto 5 percent which means that the total DA could reach upo 39 percent. 

It may be recalled that the Union Cabinet had on March 30 hiked Dearness Allowance (DA) and Dearness Relief (DR) by 3 per cent to 34 per cent to compensate for the price rise, benefitting over 1.16 crore central government employees and pensioners.

The additional instalment is effective from January 1, 2022. The increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission.