7th Pay Commission Update: Central Government Employees to Benefit from New DA Calculation Rules

  • 2 min read
  • Apr 08, 2023
7th Pay Commission Update: Central Government Employees to Benefit from New DA Calculation Rules

The Central Government has announced big news for its employees regarding the calculation of dearness allowance (DA) hike. In March, the government had already increased the DA by 4%, and now there is going to be another change in the DA calculation in July. The employees, who are currently receiving a DA rate of 42%, will be eligible for a possible increase of up to 4% in the upcoming figures.

The government regularly revises DA twice a year, given the rising inflation across the country. This helps to improve the standard of living for employees and provide dearness relief to pensioners. DA is given to employees by both the central and state governments.

The new DA calculation rule, which is part of the Seventh Pay Commission, will be based on the basic salary of salaried employees. For instance, if an employee’s minimum basic salary is Rs 25,000, their DA will be calculated as 34% of Rs 25,000, which is around Rs 8,500. It is important to note that this is just an example, and the actual figures may vary.

The Ministry of Labor has played a significant role in implementing the new DA calculation rules. In 2016, the ministry changed the base year for DA calculation and released a new series of Wage Rate Index (WRI), known as WRI-Wage Rate Index. The new series with a base year of 2016=100 replaced the old series of base year 1963-65.

The new DA calculation rules are expected to provide a significant boost to the standard of living of Central Government employees. The change in rules will also help to ensure that the DA calculation remains relevant to the current economic scenario, as it takes into account the impact of inflation on employees’ purchasing power.

The new DA calculation rules are a welcome change for Central Government employees who are eagerly awaiting an increase in their DA rates. This change in rules is also a step in the right direction in ensuring that the DA calculation remains relevant to the current economic scenario, as it considers the impact of inflation on employees’ purchasing power.