Anticipated Salary Increase for central government Employees After DA Hike in October

Central government employees are eagerly awaiting news of a dearness allowance (DA) hike, which is expected to boost their salaries. While the official announcement is anticipated in October, there has been no confirmation yet. Last year, the DA was increased during the first week of October.

Sources indicate that the government may announce a DA hike of 3-4 percent before Diwali. If approved, an entry-level employee earning a basic salary of around ₹18,000 per month could see an increase of ₹540 to ₹720 in their monthly pay, retroactive to July 1, 2024.

For instance, an employee with a total salary of ₹30,000 and a basic pay of ₹18,000 currently receives ₹9,000 as dearness allowance, which is 50 percent of the basic pay. With a 3 percent hike, this would increase to ₹9,540, while a 4 percent hike would raise it to ₹9,720. Thus, their total salary could rise by ₹540 to ₹720 per month.

DA is provided to government employees, while dearness relief (DR) is given to pensioners. Both are adjusted twice a year—once in january and again in July. Currently, more than one crore central government employees and pensioners receive a 50 percent dearness allowance.

In the last adjustment in march 2024, the government increased the dearness allowance by 4 percent to 50 percent of the basic pay, with a similar increase for dearness relief.

How is the DA Hike Determined?

The DA and DR hikes are based on the percentage increase in the 12-month average of the All india Consumer Price Index (AICPI) for the period ending june 2022. Although the allowances are revised biannually, announcements typically occur in march and September.

The 8th Pay Commission has not been introduced in the Union Budget for 2024-25. In a recent parliamentary update, minister of State for Finance Pankaj Chaudhary noted that there have been two requests for the establishment of the 8th Central Pay Commission, but no proposals are currently under consideration.

Reports suggest that the minimum salary for central government employees may rise to ₹34,560 with a fitment factor of 1.92, compared to the existing minimum of ₹18,000. Similarly, the minimum pension is expected to increase to ₹17,280.

The 7th Pay Commission initially raised salaries by 14.27 percent in 2016, whereas the 6th Pay Commission saw a significant increase of 54 percent in 2006.
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Balasahana Suresh

29/09/2024 12:07 PM