7th Pay Commission: The central government employees who are eagerly waiting for the announcement of a hike in their Dearness Allowance (DA) might hear it soon.
According to reports, a final decision with regards to the DA hike is expected to be taken during the upcoming Cabinet meeting led by Prime Minister Narendra Modi. The Cabinet meetings are typically held on Wednesdays.
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The government is reportedly going to announce a 2% DA hike, taking the allowance from 53% to 55%.
Dearness allowance is announced bi-annually to help central government employees cope with rising inflation. It is a part of the employees' take-home salary and is calculated as a portion of their basic pay.
For example, for a base pay of ₹1 lakh, the DA would be 55% if the government announced a 2% hike, which would equate to ₹55,000.
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The allowance increases the overall in-hand salary of employees as it takes effect in January and July each year.
{{/usCountry}}The allowance increases the overall in-hand salary of employees as it takes effect in January and July each year.
{{/usCountry}}For employees, DA is Dearness Allowance while for pensioners, the allowance is called Dearness Relief.
Impact on employee salaries
A 2% DA hike would raise the salary of an entry-level employee, a Multi Tasking Staff (MTS), with a basic pay of ₹18,000 by ₹360.
For instance, the employee with a basic pay of ₹18,000 currently receives ₹9,540 as DA (53%). A 2% hike would increase their DA to ₹9,900, adding ₹360 to their salary. A 3% hike, however, would mean a ₹540 increase, bringing their DA to ₹10,080.
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The DA hike that will be announced will be effective from January 1, 2025. The employees would get paid arrears based on the amount of extra money that they are entitled to since January 1, 2025.
The last DA hike given to government employees in July 2024 was 3%, which had taken the DA from 50% to 53%.