DA may be hiked by 4% for central govt employees, pensioners: Know how much salary can increase, when you likely to get it

Central government employees and pensioners are in for a treat as the Union Government is likely to hike the dearness allowance (DA) soon. To fight against inflation, the central government increases the dearness allowance periodically. It is usually revised in January and July. However, the announcement of the hike in DA and the payout comes a bit later and as we are already in the second half of September and the announcement of the next hike is not very far. How much hike in dearness allowance can a central government employee expect this time? Let's find out.

How much DA hike can central govt employees, and pensioners expect?
The DA for the central government employees is calculated based on the latest Consumer Price Index for Industrial Workers (CPI-IW). There is a set formula to calculate the dearness allowance of central government employees and pensioners.

Source: CPI-IW data published by Labour Bureau
The linking factor for the conversion of base year 2016=100 to base year 2010=100 is 2.88.

7th CPC DA% = [{Average of AICPI-IW (Base Year 2001=100) for the last 12 months – 261.42}/261.42x100]
=[{382.32-261.42}/261.42x100]
= 46.24

As you can see from the table, the average CPI-IW for the last 12 months will be 382.32. Following the formula, DA will be 46.24%. According to the set formula, the DA was coming to 42% (DA was hiked to 42% from January 1, 2023, ignoring the decimal points) that is effective from January 1, 2023.

So, the hike in DA from July 1, 2023 will be 46.24%-42% = 4.24%

So, the Union government is likely to increase the DA by 4% (ignoring the decimal points).

At present, the central government employees and pensioners get a 42% dearness allowance. So, after revision, the DA is likely to be increased to 46% (considering a DA hike of 4%). Do remember this DA will be effective from July 1, 2023.

However, talking to PTI, All India Railwaymen Federation General Secretary Shiva Gopal Mishra said, "The CPI-IW for June 2023 was released on July 31, 2023. We are demanding a four percentage point hike in dearness allowance. But the dearness allowance hike works out to be a little over three percentage points. The government does not factor in hiking DA beyond the decimal point. Thus DA is likely to be increased by three percentage points to 45%".

DA to be hiked by 4%: How central govt employees’ salary will increase
DA is calculated as a portion of the basic salary of the central government employees. For central government pensioners, it will be dearness relief. So, when DA increases the salary of the central government employees goes up.

For instance, a central government gets a basic salary of Rs 36,500 per month. At 42%, his DA was at Rs 15,330. If DA jumps by 4% from July 2023, his DA will be hiked to Rs16,790. So his in-hand salary is likely to be increased by Rs 16,425-Rs 15,330 = Rs 1,460 in a month. As the DA is effective from July 1, 2023, he will also get arrears when it will be paid. For example, if the central government releases DA with October salary, then it will be calculated from April. So, he will get an arrear for July, August, September.

For the retired central government employees, it is dearness relief. It is similar to DA and calculated similarly. So, dearness relief for the central government pensioners likely to be hiked by 4%, effective from July 1, 2023.

When can you expect the next DA hike?
The central government is likely to announce the DA hike soon. DA hike, which was effective from January 1, 2023, was announced on March 24, 2023. In 2022, the DA increase, which was applicable from July 1, was announced on September 28. More than one crore central government employees and pensioners will be beneficial.