7th Pay Commission- Government can give Diwali gift to central employees, there will be a huge increase in DA

This Diwali celebration is going to be even more spectacular for central employees as there are indications of a substantial increase in their salaries. Speculations suggest that the central government may give a significant increase in dearness allowance (DA hike) to its workforce , an announcement which was initially expected around Dussehra. Now recent reports suggest that the government may present this important gift on the auspicious occasion of Diwali. The estimated increase in DA is 4 per cent, potentially indicating a marked change in the financial outlook of these employees.

 Central government employees expect 4% DA increase:

Should the Narendra Modi government indeed choose to implement a 4 per cent increase in dearness allowance for central employees, it would be a significant increase, taking the existing 42 per cent to 46 per cent. As a result, this increase will have a direct impact on the remuneration of employees, leading to an overall improvement in their financial circumstances. Although the government has not issued any official statement regarding the impending DA hike, media reports have instilled confidence among employees with the expectation of an announcement during this Diwali.

Biennial Revision of DA:

It is noteworthy that the government revises the dearness allowance for central employees twice a year , the revised rates are effective from January 1 and July 1 respectively. In 2023, the first amendment was introduced on March 24, 2023, resulting in benefits to employees and pensioners from January 1, 2023. In the earlier adjustment, the government had increased the existing 38 percent DA by 4 percent to 42 percent. If the government goes ahead with the DA hike during Diwali, its implementation will be effective from July 1, 2023.

Making decisions based on inflation:

There is a persistent demand among employees for a 4 percent increase in DA, media reports have also suggested an expected increase in dearness allowance between 3 to 4 percent. Given its important role in determining the salaries of employees, the calculation of DA is based on the inflation rate. The higher inflation rate is in line with the larger expected increase in DA of employees.

Impact on Salary:

The impact of the proposed DA increase can be clarified through salary calculations. For an employee with a basic salary of Rs 18,000, a 3 per cent increase will result in a direct salary increase of Rs 540, while a 4 per cent increase will result in an increase of Rs 690. Similarly, the maximum basic pay will be Rs 56,900. At 45 percent DA, you will get Rs 25,605, while at 46 percent DA, you will get Rs 27,554.