Central employees and pensioners have always considered a hike in Dearness Allowance (DA) as a crucial matter. At the same time, DA will be increased under the 7th Pay Commission from March 2025. This news is likely to be good for employees and pensioners, considering the sky-high inflation and increasing cost of living. Discuss this topic in detail.
What Is Dearness Allowance (DA)?
Dearness Allowance (DA) is an allowance provided to central employees/pensioners as compensation of loss due to inflation. The amount of this allowance is fixed on the basis of the Consumer Price Index (CPI) and is revised every six months. Under the 7th Departmental Pay Commission, DA is computed on the base of basic pay of the employees.
DA Hike Expected In March 2025
The expected rise of DA in March 2025 is due to the unending rise in inflation. The Government of India bent a knee to the needs of the people and reviewed the increase or adjustments of DA every January and July in every year. Today, the DA rate goes more than 50 percent and is still expected to balloon by March 2025. If things about the inflation rate remain the same, then it is expected by the experts that there would be a DA increase of 4-5 percent.
Effects Of DA Hike
The increase in DA affects the payable direct earnings of central employees and pensioners, increasing their monthly salary and improving their capacity to purchase. Apart from these employees, the pensioners will also be benefited from this hike because their pension is linked to DA.
How Is DA Increase Calculated?
DA is based on the Consumer Price Index (CPI) of India. DA rates are determined on basis of increments in CPI. A formula fixed under the 7th Pay Commission is used for computing the DA based on data obtained from CPI. The DA hike is computed per this formula, and salary is added for employees of India.
Conclusion
So the bright side of the increase in 7th Pay Commission DA is that everything is likely to increase in March 2025 relative to central employees and pensioners. This increase would help stretch and tighten their income and reduce inflation’s effects. But the government would first evaluate the DA’s increments before taking a final call. Meanwhile, employees and pensioners may wait for the official word in this regard.
Also Read: Big News On 8th Pay Commission For Central Employees, See Details
