Delhi, April 15: After a 4% increase in Dearness Allowance (DA) for central government employees in January 2023, the government may further raise the DA by an additional 4% in July of this year on 7th pay commission recommendations, reports said. The DA and Dearness Relief (DR) are reviewed twice a year, in January and July.

Moneycontrol reported that the DA for the central government employees is calculated based on the latest Consumer Price Index for Industrial Workers (CPI-IW). The Labour Bureau, a wing of the Labour Ministry, publishes the CPI-IW data every month. There is a set formula to calculate the dearness allowance of central government employees and pensioners. Central Government Planning to Replace 7th Pay Commission With 8th Pay Commission in 2024? Know How Much Salary Might Increase.

On the other hand, latest media reports claim that the Centre may be considering a new formula for Dearness Allowance increase calculation. The government is planning to do away with the pay commission in the next few years and is set to introduce a new formula for calculation of salaries of central employees. 7th Pay Commission Good News: Centre Likely To Raise Fitment Factor Rate in 2024, Here's How Much Salary Might Increase.

The dearness allowance is calculated by multiplying the current rate of dearness allowance of the 7th Pay Commission with the basic pay. The current rate of percentage is 12%, if your basic pay is Rs 56,900 DA (56,900 x12)/100. Percentage of Dearness Allowance = Average of CPI for the last 12 months - 115.76. Now the amount that comes will be divided by 115.76. The score that comes will be multiplied by 100.

The Dearness Allowance (DA) is usually revised twice every year in January and July. The recent DA hike will benefit around 47.58 lakh central government employees and 69.76 lakh central government pensioners. DA and DR will be applicable to central government employees and pensioners with retrospective effect from January 1, 2023.

(The above story first appeared on LatestLY on Apr 15, 2023 06:21 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).