Dearness Allowance Latest News: The Narendra Modi government is likely to increase the dearness allowance by 3 percent, a CNBC-TV 18 report said on Friday. According to the report, if approved, this will be the second hike in both dearness relief (DR) and dearness allowance (DA).

The decision is likely to be announced in September next month, the report further said. At present, the dearness allowance for the central government employees stands at 50 percent. With the September increase, the DA is likely to go up to 53 percent.

However, the Centre may not release the arrears, which were put on hold since the coronavirus pandemic, the report said.

As of now, the central government employees have not received 18-month arrears. It should be noted that there is no official statement by the government regarding the 7th Pay Commission announcement.

How is DA calculated?

The Centre calculates the dearness allowance based on the CPI-IW data, which is published every month by the Labour Bureau.

What’s the formula of DA calculation?

For the central government staff: DA percent = (Average of AICPI (Base Year 2001=100) for the past 12 months -115.76)/115.76) *100 where AICPI stands for All India Consumer Price Index, the CNBC-TV18 report added.

On the other hand, for public sector government employees, the formula is:
DA percent = ((Average of AICPI (Base Year 2016=100) for the past 3 months -126.33)/126.33) *100

When was the last DA announcement made?

The last time the Modi government announced the hike in the dearness allowance was on March 7 earlier this year. This increase was effective from January 1, 2024. It had increased the DA to 50 percent.

Know about 7th Pay Commission

The 7th Pay Commission was formed in 2014. Usually, the Centre establishes a pay commission at an interval of every 10 years to adjust the salaries of central government employees.