Central Govt Employees Will Receive Higher Salary From July 1st: Find Out Why? And How Much?

Central government employees are set to receive a Dearness Allowance (DA) hike, expected to take effect from July 1.

Bi-Annual Practice

The government may give an update on how much DA will be increased at the end of July. 

The DA is revised twice a year — January and July.

The chances of a hike are especially high given that retail inflation is also very high.

The DA will be hiked to 38%.

Purpose Of Hike

The govt issued the same to act as a buffer against inflation and to maintain living standards

A 4% hike in DA has been decided for July-August based on All India Consumer Price Index (AICPI) which arrived back in March

Last Year’s Hike

In July 2021, the Centre had increased the dearness allowance and dearness relief for the central government employees and pensioners, respectively, to 28 per cent from 17 per cent.

Later in October 2021 they received yet another jump of 3 per cent in dearness allowance.

This took the total hike in dearness allowance to 31 per cent.

Conditions For Hike

The AICP Index for the first two months of 2022 saw a dip. 

From 125.1 in January to 125 in February, followed by a jump of 1 point to 126 in March.

The figures for the next three months of April, May and June are yet to arrive.

If the index climbs above 126, the government will be able to give a 4% DA hike.

This hike would take the DA figure to 38 percent from the current 34 percent.

Impact

This will clearly affect the maximum and minimum basic salary of central government employees.

For maximum basic salary:

– Basic salary per month: Rs 56,900

– DA received (34%): Rs 19,346

– DA after revision (38%): Rs 21,622

– Monthly increase in DA: Rs 2,276

– Annual increase (monthly increase x 12): Rs 27,312

For minimum basic salary:

– Basic salary per month: Rs 18,000

– DA received (34%): Rs 6,120

– DA after revision (38%): Rs: 6840

– Monthly increase in DA: Rs 720

– Annual increase: Rs 8,640

 Calculation 

The central government in 2006 changed the formula to calculate the DA.

For the central government employees: 

Dearness Allowance % = ((Average of All-India Consumer Price Index (Base Year 2001=100) for the past 12 months -115.76)/115.76)*100.

For Central public sector employees:

Dearness Allowance % = ((Average of All-India Consumer Price Index (Base Year 2001=100) for the past 3 months -126.33)/126.33)*100.