New Delhi, August 8: The central government employees are eagerly awaiting the announcement of the dearness allowance (DA) hike for the July-September period, with expectations of good news coming soon. According to reports, the Narendra Modi government is likely to announce the next DA hike in the first week of September on 7th pay commission recommendations.

Earlier this year, in March, the government announced a 4% hike in DA on 7th pay commission recommendation, implemented retrospectively from January 2024, bringing the DA level to 50% of the basic pay. Speculation had arisen that with DA reaching 50%, it might be merged with the basic pay, resetting the DA percentage to 0%. However, the government has consistently clarified that such a move is not currently under consideration. 7th Pay Commission Latest Update: Will DA Merge With Basic Salary After Reaching 50%? Know Calculation for Central Government Employees.

A senior finance ministry official explained that the idea of merging DA with the basic pay was originally proposed by the 5th Pay Commission, which suggested doing so whenever the consumer price index increased by 50% over the base index used by the last pay commission. Comparing Employee Benefits: What 8th Pay Commission Promises Compared to 7th Pay Commission.

This recommendation led to a precedent in February 2004, when DA was merged with the basic pay after reaching the 50% mark. However, the 6th Pay Commission later advised against this practice, even when DA exceeds 50% of the basic salary.

How Much DA Hike is Expected?

As the announcement approaches, it is anticipated that the upcoming DA hike will be at least 3%, benefiting both government employees and pensioners, who receive dearness relief (DR) based on similar calculations. The DA hike is determined by the All India Consumer Price Index (AICPI), which tracks changes in retail prices across various sectors.

(The above story first appeared on LatestLY on Aug 08, 2024 03:41 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).