7th Pay Commission: 4 per cent DA hike for central government employees in 2023? CHECK the latest updates

Central government employees may get a hike in their salary at the start of the new year 2023. According to media reports, the central government employees are likely to get this good news once the government takes the final decision on three issues- DA and DR hike, fitment factor revision, and clearing 18-month DA arrears. All these three decisions will play a role in the increment of the salary of the employees.

Dearness allowance (DA) and dearness relief (DR) are revised twice a year, on January 1 and July 1 of each year. The most recent increase, which benefited approximately 48 lakh central government employees and 68 lakh pensioners, increased the DA by 4 per centto 38 per cent. Prior to this, the government raised the DA by pe rcent to 34 per centin March as part of the 7th Pay Commission.

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DA Increase in 2023

According to media reports, the DA and DR will be raised by 3-5 per centin March 2023, with effect from January 2023. The DA will rise by up to 43 per centas a result of this increase.

18-month DA arrear

The issue of an 18-month DA arrears payment from January 2020 to June 2021 may be resolved soon. Employees may be paid for an 18-month DA arrear, this amount is decided by the employee's pay band and structure.

Fitment Factor

Employee unions have been demanding that the fitment factor in their salaries shouldbe revised. The fitment factor is a common value that is multiplied by the employee's basic pay to determine their total salary. The current common fitment benefit for all categories of central government employees is 2.57.

How DA Hike Is Determined?

The government decides on DA increases based on the country's inflation rate. If inflation is high, the DA will most likely be raised further. For the past ten months, retail inflation in India has been above the RBI's comfort zone of 2-6 per cent. This may prompt the government to allow for additional salary increases.

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The DA and DR increases are determined by the percentage increase in the 12-month average of the All India Consumer Price Index (AICPI) for the fiscal year ending June 2022. Although the central government revises the allowances on January 1st and July 1st of each year, the decision is usually announced in March and September.

The Union Cabinet approved a 3 per cent increase in DA under the 7th Pay Commission in March, bringing the DA to 34 per centof the basic income. The central government revised the formula for calculating DA and DR for central government employees and pensioners in 2006.