7th Pay Commission proposes a 4% increase in the dearness allowance: Look into how this will impact your salary?
The Centre is preparing to announce a big announcement regarding the updated Dearness Allowance (DA) and Dearness Relief (DR) for central government employees and retirees under the 7th Pay Commission during the festive period.
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The long-awaited news might surface in October, despite no official remark yet being that no official remark has yet been made.
According to media sources, the central government is reportedly considering raising the DA by 4%, potentially bringing the current 42% to 46%. However, the government will make the final choice and the cabinet must approve it.
Beginning on July 1, 2023, the dearness allowance will increase. From January through June, the All India Consumer Price Index (AICPI) will determine the DA rate.
With the current DA at 42%, those who make as least Rs 18,000 a month receive an increase of Rs 7,560 each month. This monthly hike will reportedly reach Rs 8,280 when the new DA rate of 46% is applied. Therefore, employees on this base income might therefore expect an increase of Rs 8,640 per year in salary.
For those with a maximum basic salary of Rs. 56,900, the current DA at 42% increases their monthly income by Rs. 23,898. This monthly amount will reportedly raise to Rs 26,174 with the DA rises to 46%. As a result, those who earn this greater basic pay can anticipate a sizable rise in compensation of Rs 27,312.
What is Dearness Allowance?
To offset the effects of inflation, the Indian government pays Dearness Allowance to its employees and pensioners.
The salary component of DA is not fixed because it is based on the cost of living. Depending on where they work, public sector employees have different working conditions. Because of this, the DA allowance varies for workers in the rural, urban, and semi-urban sectors.
Twice a year, DA rates are subject to revision. Every six months, the government raises this allowance. The change is typically implemented on January 1st for the period beginning in January and ending in June, and on July 1st for the period beginning in July and ending in December.
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