Central government employees are likely to get a Diwali gift as the government is likely to announce a 3% hike in the dignity allowance (DA) or 7th Pay Commission, followed by an increase in the salaries of government officials. The decision will be discussed and finalised in an upcoming Narendra Modi-led Cabinet meeting ahead of the festive season. Pensioners will also benefit from this decision.
The DA is calculated using the All India Consumer Price Index (AICPI), which tracks retail price movements and is updated twice a year. The hike in the dearness allowance is decided based on the retail price of consumer products and other things.
Also Read | DA Hike in Chhattisgarh: State Government Employees to Get 50% Dearness Allowance Ahead of Diwali.
Currently, central government employees receive a 50% dearness allowance. Following the new announcement, employees will be eligible to receive 53% DA from July 1, 2024, and will receive the arrears of July, August, and September in their next salary. Over one crore central government employees and pensioners will benefit from a 3% hike in DA.
But under the 7th Pay Commission, there is no rule that once DA exceeds 50% it must be made zero. Therefore, it is said that the depreciation will not be made zero and will continue as it is.
In January, the AICPI index stood at 138.9 points, due to which depreciation increased to 50.84%. This was followed by 139.2 points in February, 138.9 points in March, 139.4 points in April and 139.9 points in May. According to this system, depreciation reached 51.44%, 51.95%, 52.43% in April and 52.91% by May. While the index stood at 141.4 points in June, the affordability score increased to 53.36%.
Let's say the Basic Salary of a central government employee is Rs 18,000. If depreciation increases by 3%, his salary will increase by Rs.540 per month. The annual increase will be Rs.6,480. If depreciation increases by 4%, his monthly salary will increase by Rs 720. The annual salary will increase by Rs.7,440.