7th Pay Commission: Modi Govt May Announce DA Hike Next Week? Here's How Much Salary Will Increase

7th Pay Commission DA Hike Update: The Narendra Modi government may present a post holiday extravaganza to central government employees next week. Modi government is supposed to hold a cabinet meet on March 15, post which the announcement on DA Hike for government employees may be announced.

The All-India CPI-IW for January, 2023 increased by 0.5 points and stood at 132.8 (one hundred thirty two point eight). On 1-month percentage change, it increased by 0.38 per cent with respect to previous month compared to decrease of 0.24 per cent recorded between corresponding months a year ago.

However, if the cabinet meeting does not discuss the issue of DA next week, then there might be a hint regarding the anticipated Dearness Allowance (DA) hike in the All India Consumer Price Index (AICPI) figures that the Labor Ministry releases by the end of the month. The next issue of CPI-IW for the month of February, 2023 will be released on Friday, 31st March, 2023.

The AICPI data for December 2022 were 132.3. The only factor used to calculate the daily pay for central workers is the AICPI index. The index covered 88 centres as well as the entire nation. The last working day of every month sees the release of the AICPI. 

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

How much will salaries increase if the government increases the DA by 3%, bringing it to 41 percent?

With a minimum basic wage of Rs. 18,000

If the DA is increased to 41% (Rs 7,380/month)

Actual 38% DA = Rs 6,840 per month

monthly salary rises of Rs 900 (Rs 7,380 minus Rs 6,840)

Increase in annual salary: Rs 900 x 12 = Rs. 10,800

Assuming a base income of Rs 56,900

If the DA is increased to 41%, the monthly salary would be Rs 23,329

Actual 38% DA = Rs 21,622 per month

monthly salary increments of Rs 1,707 (Rs 23,329 minus Rs 21,622)

Increase in annual salary: Rs 1,707 x 12 = Rs. 20,484

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

According to the percentage increase in the 12 monthly average of the All India Consumer Price Index for the period ending June 2022, the Union Cabinet had approved the release of an additional instalment of Dearness Allowance and Dearness Relief @ 4 percent to Central Government employees and pensioners due from July 1, 2022. With effect from July 1,2022, both Central Government employees and pensioners are now eligible to increased amounts of Dearness Allowance and Dearness Relief, respectively.

According to estimates, the additional financial effects of this increase in Dearness Allowance for Central Government Employees will total Rs. 6,591.36 billion each year 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).

According to estimates, this rise in Dearness Relief for Pensioners will have significant financial effects totaling Rs. 6,261.20 billion annually and Rs. 4,174.12 billion in the fiscal year 2022–2023 (i.e. for a period of 8 months from July, 2022 to February, 2023).

The combined burden of Dearness Allowance and Dearness Relief on the exchequer would be in the range of Rs.12,852.56 billion each year, and Rs.8,568.36 billion in the fiscal year 2022–2023 (i.e. for a period of 8 months from July, 2022 to February, 2023).