7th pay commission update: After DA hike upto 34%, another good news for central govt employees soon?

New Delhi: Bringing joy to lakhs of central government employees, the Union cabinet last month gave approval for 3 percent hike in Dearness Allowance (DA) under the 7th pay commission. With this recent rise, DA has now become 34% of the basic income. Over 50 lakh government employees and 65 lakh pensioners are getting profit from this move.

Dearness Allowance (DA) and Dearness Relief (DR) to Central Government Employees and Pensioners are calculated on the basis of the rate of inflation as per All India Consumer Price Index for Industrial Workers (AICPI0IW), released by Labour Bureau, M/o of Labour and Employment.

The average retail inflation rate for the October-December quarter of 2021 was 5.01 percent, but it jumped to 6.07 percent in February of this year.

Now that the DA hike has been accorded, another speculation is doing the rounds in the media that the government might give another round of good news to the central government employees by increasing HRA.

Last time the HRA hiked in July 2021. At that time the DA had crossed the 25 percent mark while the government had increased the DA to 28 percent. Now that the government has increased DA to 34 percent, it is widely expected that HRA could also be revised. Now, if the government revises the HRA, there would be a very good impact in the overall salary of government employees.

Impact on House Rent Allowance

HRA is paid @24 percent, 16 percent and 8 percent for X, Y & Z cities respectively. HRA not to be less than Rs 5400, Rs 3600 and Rs 1800 for X, Y and Z cities, calculated @30 percent, 20  percent and 10  percent of basic pay of Rs 18,000. But this however is only possible when DA will be beyond 50 percent. Because according to the old order of the government, if the DA crosses 50 percent, then the HRA will be 30 percent, 20 percent and 10 percent.