Here's how much DR increase can Central Govt employees, pensioners expect

Central government staff who have been eagerly waiting for the (DA) or Dearness Relief (DR) hike announcement! If sources as to be believed, then the increase in DA/DR for central government employees is likely to be announced in a few weeks — most probably in the month of October itself.

Wheels were in motion for the second half's announcement ever since the DA hike for H1 was announced was announced by the Central Government in March. The DA hike of 4 per cent — increasing the dearness allowance figure from 38 per cent to 42 per cent — was announced by Union Minister Anurag Thakur on March 24, 2023.

DA Hike: When will Dearness Allowance Hike be announced? 

Currently, 42 per cent dearness allowance (DA) / dearness relief (DR) is paid to central government employees. And, if sources are to be believed, a 4 per cent DA hike will likely be announced by the Central Government around Dussehra or Vijaya Dashami — Tuesday, October 24, or latest by Diwali holiday — Sunday, November 12, 2023.    

With the DA hike about to be announced for the Central Government employees, the arrears from July 2023 onwards will also be disbursed with October salary (if announced on Dussehra), or alongwith the November salary (in case the DA/DR increase announcement in made around Diwali). 

The arrear payment will be done the on the basis of the percentage hike announced — for example - 4 per cent arrear will be paid, if 4 per cent DA hike is announced.

Dearness Allowance hike in October: What affects DA Hike?

The calculation of Dearness Allowance is done with regards to the Consumer Price Index Numbers For Industrial Workers (CPI-IW index) of the corresponding months. As per sources, the rise in the index over the past few months indicates that a DA hike of 4 per cent can be expected by the Central Government employees in October this year (strictly subject to announcement). 

DA Hike: How much will Dearness Allowance increase?

Based on the calculations of the 7th Pay Commission, the dearness allowance applicable from July 1, 2023 may increase by 4 per cent. According to experts, even if the CPI-IW index numbers do not change in the upcoming reviews, the inflation figures of over 6 per cent will likely lead to the dearness allowance rising to 46 per cent, say experts.

DA Hike: How is AICPI-IW index calculation done?

The Ministry of Labour & Employment's Labour Bureau announces the Consumer Price Index Numbers For Industrial Workers for the previous month - on the last working day of the next month. To Labour Bureau calculates the index number after collecting retail prices data from 317 markets from 88 industrially important centres in India. 

DA Hike: Dearness Allowance Formula 

For central government employees, the calculation that is used to formulate the dearness allowance is 

Dearness Allowance Formula - [(Average of All India Consumer Price Index AICPI) for the last 12 months - 115.76)/115.76]×100. 

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