7th Pay Commission Latest News: The month of February is expected to be wealthy for central government employees. Because of the DA increase for the month of January, more than 1 crore employees and pensioners will see a pay increase. The salary increase will be up to Rs 90,000.
Central Government Employees To Get 34% DA Hike
The central government employees and retirees would get a 34% Dearness Allowance (DA). For the months of 2021, the DA will be determined using the All India Consumer Price Index.
Previously, the DA for central government employees was computed using the consumer price index with 2001 as the base year. From September 2020, the government will use a new consumer price index with a base year of 2016 to calculate the DA. To calculate the DA, a linking factor of 2.88 is needed to connect the old CPI series and the new consumer price index.
The Dearness Allowance for Central Government Employees and Pensioners will be determined using this linking factor. By multiplying the Consumer Price Index with base 2016=100 for the month of January 2021, which is 118.2, it may be translated to CPI with base 2001=100.
Here is the table for calculating CPI (IW) 2001=100 using the linking factor from January to December 2021:
|
From September 2020, the government will release the CPI (IW) 2016=100 |
The linking factor of 2.88 was used to calculate the CPI (IW) 2001=100. |
|
|
January |
118.2 |
340 |
|
|
February |
119.0 |
343 |
|
|
March |
119.6 |
344 |
|
|
April |
120.1 |
346 |
|
|
May |
120.6 |
347 |
|
|
June |
121.7 |
350 |
|
|
July |
122.8 |
354 |
|
|
August |
123.0 |
354 |
|
|
September |
123.3 |
355 |
|
|
October |
124.9 |
360 |
|
|
November |
125.7 |
362 |
|
|
December |
125.4 |
361 |
Current Dearness Allowance (DA) Increase
According to media reports, the Dearness Allowance (DA) hike announcement could take place by the end of March. In January 2022, DA was increased by 3%, bringing the total DA received by employees to 34% from 31%. According to AICPI data, DA has reached 34.04% until December 2021. After a 3% increase in allowance, the DA on a Rs 18,000 basic salary will be Rs 73,440 per year.
Here is the Calculation on Minimum & Maximum Basic Salary
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Employee's basic salary is Rs 18,000 per month.
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New DA (34%), Rs 6120/month.
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DA so far (31%), Rs 5580/month.
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How much has the dearness allowance increased? 6120 - 5580 = Rs 540 per month.
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An increase in annual salary of 540x12 = Rs 6,480.
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Total DA = Rs 73,440 (6120X12).
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The employee's basic salary is Rs 56900.
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New DA (34%), Rs 19346 per month.
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DA so far (31%), Rs 17639 per month.
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How much has the dearness allowance increased? 19346-17639 = 1,707 Rs per month.
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Annual salary increase of 1,707 X 12 = Rs 20,484.
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Total DA – 19346 X 12 = Rs 232,152.
- *Source: DNA India*
