7th Pay Commission: Next update on Dearness allowance hike may come on January 31, here's why

New Delhi: The hint for hike in next Dearness Allowance (DA) could come on January 31, when the Labor Ministry publishes the All India Consumer Price Index (AICPI) figures. Dearness allowance for central employees is calculated solely on the basis of the AICPI index. The index was created for 88 centers as well as the entire country. Every month, the AICPI is published on the last working day.

The AICPI figures for November 2022 was 132.5. Media reports are hinting that if the upcoming index (for the December 2022) remains constant, then the dearness allowance will increase by 3 percent. Thus, the DA will rise to 41 percent from the current 38 percent.

7th Pay Commission: DA hiked by 4 percent to 38 percent

The Union Cabinet had on 28 September 2022, approved the release of additional instalment of Dearness Allowance and Dearness Relief @ 4 percent to Central Government employees and pensioners due from 01.07.2022 based on the percentage increase in 12 monthly average of All India Consumer Price Index for the period ending June, 2022. The Central Government employees and pensioners had become entitled to higher amount of Dearness Allowance and Dearness Relief respectively, w.e.f. 01.07.2022.

The additional financial implications on account of this increase of Dearness Allowance to Central Government employees are estimated at Rs.6,591.36 crore per annum; and Rs.4,394.24 crore in the financial year 2022-23 (i.e. for a period of 8 months from July, 2022 to February, 2023).

The additional financial implications on account of this increase of Dearness Relief to pensioners are estimated at Rs.6,261.20 crore per annum; and Rs.4,174.12 crore in the financial year 2022-23 (i.e. for a period of 8 months from July, 2022 to February, 2023).

The combined impart on the exchequer on account of both Dearness Allowance and Dearness Relief would be of the order of Rs.12,852.56 crore per annum; and Rs.8,568.36 crore in the financial year 2022-23 (i.e. for a period of 8 months from July, 2022 to February, 2023).