7th Pay Commission: DA hiked upto 34%, will these 4 allowances also increase now?

New Delhi: After the recent cabinet nod on Dearness Allowance, DA has now become 34% of the basic income. With the hike in DA, now reports being widely circulated in the media that 4 other allowances that are decided based on the DA level, may also increase. Here's the list.

1. The DA is proportional to the base wage. As a result, a raise in DA will also raise central government employees' monthly provident fund (PF)

2. The gratuity amounts of the employees will also be increased due to the hike in DA.

3. The hike in dearness allowance has also cleared the path for hike in Travel/Transport Allowance and City Allowance of the employees. 

4. There have also been speculations in the media that the government is contemplating a hike in the HRA as the DA has been hiked.

The Union Cabinet chaired by Prime Minister Narendra Modi had on March 30, 2022 given its approval to release an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 01.01.2022 representing an increase of 3% over the existing rate of 31% of the Basic Pay/Pension, to compensate for price rise.

This increase was approved in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission.

The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be Rs.9,544.50 crore per annum. This will benefit about 47.68 lakh Central Government employees and 68.62 lakh pensioners.

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