7th Pay Commission: Suspense On Dearness Allowance hike To Be Over In Today's Cabinet Meet? DA Likely To Be Increased To 50%, Say Reports

New Delhi: 7th Pay Commission Latest update on DA hike -- In what may come as a bumper festive bonanza ahead of Holi, the union government might make big announcement regarding Dearness Allowance. As per reports in the Economic Times, government may announce to hike DA for lakhs of central government employees to 50 percent.

The Union Cabinet is slated to meet today, during which it is expected to take decision on DA hike, several news media outlets have reported. The Economic Times has also said that government also likely to extended the LPG subsidy scheme by another year.

As per the recommendations of the 7th Pay Commission, once the DA reaches 50 percent, there will also be an increase in the house rent allowance, children's education allowance, transport allowance etc. due to the Central government staff, which will further raise their take-home pay packet.

When implemented, the increase in DA and DR will be effective from January 1, 2024, along with arrears for the previous months that the government employees are entitled to get.

The dearness allowance for Central government employees is calculated based on the latest Consumer Price Index for Industrial Workers (CPI-IW). The Labour Bureau, a wing of the Ministry of Labour, publishes the CPI-IW data every month.The Union government usually revises the dearness allowance twice a year, in January and July. 

In October 2023, the Union Cabinet announced a 4 percent hike in Dearness Allowance to 46 percent. The government announced a 4 percent DA hike from 42 percent to 46 percent. The recognised formula, which is based on the recommendations of the 7th Central Pay Commission, is being followed in order to raise DA.

"The Union Cabinet, chaired by the Prime Minister, Shri Narendra Modi has approved to release an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 01.07.2023 representing an increase of 4% over the existing rate of 42% of the Basic Pay/Pension, to compensate against price rise. This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission," said an official release.

The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be Rs.12,857 crore per annum. This will benefit about 48.67 lakh Central Government employees and 67.95 lakh pensioners.