7th Pay Commission: Big News for Central Government Employees!

7th Pay Commission

During this festive season, central govt employees are in for some great news. Exciting updates are on the horizon, and preparations for the coming year are already underway.

Notably, a noteworthy 5% increase in dearness allowance is anticipated for central employees starting in January 2024.

The dearness allowance was changed to 46 percent as of July 1, 2023, and there will not be another adjustment until January 20, 2024.

Estimated numbers indicate that this may be the largest revision to date.

The dearness allowance might go up by 5%.

For central government employees, 2024 is significant because dearness allowance (DA) could be higher than 50%.

The dearness allowance for central employees has increased by 4% over the last four revisions, according to historical trends.

But in the coming year, a record-breaking 5% increase in dearness allowance is anticipated.

AICPI Index: Dearness allowance calculator

Using the All-India Consumer Price Index (AICPI), dearness allowance is calculated. The proper increase in employees’ allowance in relation to inflation is determined by this index, which is based on inflation data from multiple sectors.

DA% for central government employees is calculated as:

DA%= {(Average of All India Consumer Price Index for last 12 months – 115.76)/115.76} × 100

Where, the value 115.76 represents the base index.

What is the current level of dearness allowance?

Currently available AICPI index numbers for July, August, and September yield a dearness allowance of 48.54 percent.

According to projections, this percentage might rise above 49.30 percent in October. The data from October, November, and December will determine the final increase in DA for January 2024; confirmation of this will be needed from the December 2023 AICPI index numbers.

A significant surge in dearness allowance:

From July to December 2023, the dearness allowance under the 7th Pay Commission is dependent upon AICPI numbers.

There are three more months of data to go through, with the current percentage at 48.54 percent.

Experts estimate that there could be a 2.50 percent increase, which would cause the dearness allowance to increase by 5% in January 2024.

A steady monthly increase is recommended by the Dearness Allowance calculator (DA calculator), which increases the probability of this 5% increase in Dearness Allowance.

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