Introduction
The wait for government employees will end soon as their inflation allowance is set to increase. Along with the dearness allowance, their arrears will also be sanctioned. However, the government is yet to officially announce the exact percentage increase in the inflation allowance.
When will the benefit of increased inflation allowance be available?
The increased inflation allowance will be applicable to Central Government employees under the 7th Pay Commission. This dearness allowance will be approved in the second half of this year. The inflation allowance is increased twice a year, with the first increase taking effect from January and the second increase from July.
How much will it increase?
The exact increase in the inflation allowance is still uncertain, but based on the AICPI (IW) index number, there is a clear indication of a 4 percent increase. The current rate of dearness allowance is 42 percent, so this indicates a 4 percent increase in the inflation allowance.
Where did 3 percent come from?
In a statement, Railway Federation General Secretary Shivgopal Mishra mentioned that the dearness allowance (DA) of central government employees will be increased by three percent. However, the concrete reason for this specific percentage increase has not been provided.
Arrears will also be available along with Inflation Allowance
Central employees can expect to receive their increased inflation allowance and arrears during the festive period in October. If the announcement is made in October, the increase and arrears will be applicable from 1st July 2023.
Understand the calculation of index here
Refer to the image below for a detailed calculation of the index:
What will be the difference in salary?
Based on the 7th Pay Commission, the basic pay of central employees ranges from Rs 18,000 to Rs 56,900. The increase in dearness allowance will result in an annual salary increase of Rs. 8,640.
DA increases twice a year
Currently, central government employees and pensioners receive a dearness allowance of 42 percent. This allowance is increased twice a year in January and July. The increase is likely to be 3 to 45 percent.
Dearness Allowance – When will it be increased? Ganesh Chaturthi or Diwali?
In previous years, the government has announced an increase in the dearness allowance before Diwali. This year, there are speculations that the announcement may be made during Ganesh Utsav.
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