In January, the DA for the central government employees under the 7th Pay Commission was revised upwards to 34 per cent, from the earlier rate of 31 per cent. It is revised based on the AICPI. The retail inflation, based on CPI, in April, stood at an eight-year high of 7.79 per cent.
Before this, the Centre had in July 2021 hiked DA and dearness relief (DR) for the central government employees and pensioners, respectively, to 28 per cent from 17 per cent after a long pause. Dearness allowance (DA) is given to government employees, while dearness relief (DR) is for pensioners.
DA Related Allowances Hike
Amidst the speculation on a probable hike in DA in the month of July, media reports are also rife that 4 other allowances that are decided based on the DA level, may also increase. Here’s the list.
- The DA is proportional to the base wage. As a result, a rise in DA will also raise central government employees’ monthly provident fund (PF).
- The gratuity amounts of the employees will also be increased due to the hike in DA.
- The hike in dearness allowance has also cleared the path for the hike in Travel/Transport Allowance and City Allowance of the employees.
- There have also been speculations in the media that the government is contemplating a hike in the HRA as the DA has been hiked.
All-India Consumer Price Index
The All-India CPI-IW for April 2022 increased by 1.7 points and stood at 127.7 (one hundred twenty-seven point seven). On 1-month percentage change, it increased by 1.35 per cent with respect to the previous month compared to an increase of 0.42 per cent recorded between corresponding months a year ago, showed a Ministry of Labour and Employment data. The April AICP Index has fuelled further speculation that DA could be hiked by up to 5 per cent which means that the total DA could reach up to 39 per cent.