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Govt Yet to Hike DA for Second Half of 2022; When Will it be Implemented?

DA Hike 7th Pay Commission: The Reserve Bank of India retained its inflation forecast at 6.7 per cent for the current financial year 2022-23. As per the monetary policy statement, “the inflation projection is retained at 6.7 per cent in 2022-23, with Q2 at 7.1 per cent; Q3 at 6.4 per cent; and Q4 at 5.8 per cent, and risks evenly balanced. CPI inflation for Q1:2023-24 is projected at 5.0 per cent.” With inflation rates being retained, central government employees can expect a DA hike in the coming months. As per reports, the government may hike DA and DR by as much as 4 per cent. DA and DR are revised on the basis of retail inflation, which has been over 7 per cent for a long time now.

How Much DA Hike is Expected?

The AICPI in January and February were 125.1 and 125, respectively, while in March it rose to 126. The AICPI in April increased to 127.7, due to the rising inflation. In May, there was a big jump of AICPI to 129. Now, if the AICPI remains to that level, DA hike of 4 per cent is likely. The CPI-based inflation in April stood at an eight-year high of 7.79 per cent. However, it cooled off to 7.01 per cent in June.

Currently, government employees get a DA of 34 per cent on their basic salary. If the DA hike of 4 per cent is implemented, they are going to get a 39 per cent dearness allowance on top of their basic pay. Dearness allowance (DA) is given to government employees, while dearness relief (DR) is for pensioners. The government had in March this year revised the DA, which then rose by 3 per cent to stand at 34 per cent of an employee’s basic salary. This was done due to rising prices, and the central government hiked DA by 3 per cent to compensate the inflation rate. The April AICPI has fuelled rumours that the government may consider a DA hike of 4 per cent in the coming months.

DA Hike 7th Pay Commission: Salary Calculation

Going by the department of expenditure’s notice, if an employee’s basic pay is Rs 18,000, he or she will get a Dearness Allowance of Rs 6,120 after the latest hike that was implemented in April. At the rate of 31 per cent DA earlier, the employee was getting DA of Rs 5,580. This will mean that an increase of Rs 540 has been made after the latest DA hike. If the DA is increased by another 5 per cent, that is, if the employee gets 39 per cent DA on a basic salary of Rs 18,000, the DA will be Rs 7,020. This means that the salary will increase by Rs 900 if the DA hike of 5 per cent is implemented.

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