7th Pay Commission: Central government employees in India could see 4 per cent DA hike in March

The Indian government is likely to announce a 4 per cent hike in dearness allowance (DA) for central government employees next month, i.e. in March 2024, according to reports.

Dearness allowance and dearness relief will see an increase of 50 per cent after the 4 per cent hike in DA.

The central government decides the quantum of hike in DA and dearness relief (DR) on the basis of the All-India CPI-IW data.

The Consumer Price Index for Industrial Workers (CPI-IW) was 392.83 on average for a 12-month period. According to this, the DA comes out to be 50.26 per cent of the basic pay.

DA is given to the ones employed by the government, whereas, DR is given to pensioners.

Both DA and DR witness a hike twice a year, i.e. in January as well as in July.

The DA was raised by 4% to 46% in October 2023 during the most recent increment. The next DA hike is anticipated to be 4% given the current rate of inflation.

As per the official data, there are 69.76 lakh pensioners and 47.58 lakh central government employees.

After the upcoming DA hike, both employees and pensioners will be benefitted.

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.

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.

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.

(With inputs from agencies)