7th Pay Commission 2024 Latest News: Central government employees are on the verge of receiving a significant update regarding their salaries as per the 7th Pay Commission. According to a report from News 18, it is anticipated that these employees will witness a 4% increase in Dearness Allowance, expected to be implemented around March 2024. Central government employees should be aware that Dearness Allowance is provided to them, whereas Dearness Relief (DR) is provided to pensioners.
The DA is typically updated biannually, in January and July. The declaration regarding the upcoming DA increase is anticipated to be announced in March 2024. The latest news from the 7th Pay Commission reveals that government employees in two states have recently received significant increases in dearness allowance just before the Lok Sabha Elections in 2024.
The West Bengal government announced a 4% hike in DA for state employees during the budget presentation this week, while the Uttar Pradesh government followed suit with a 10% DA hike for its employees. It is important to assess the impact of these hikes on the salaries of government employees in both states.
What is DA?
The dearness allowance and dearness relief are crucial aspects for Central government employees to understand. Dearness allowance is a vital component of their salary, designed to mitigate the adverse effects of inflation. To keep up with the escalating inflation, the effective salary of government employees is periodically adjusted by the Centre. This adjustment occurs twice a year, specifically in January and July.
Latest Consumer Price Index 2024 Report
The dearness allowance for central government employees is determined by the latest Consumer Price Index for Industrial Workers (CPI-IW) data published monthly by the Labour Bureau, a division of the Ministry of Labour. The dearness allowance calculation for central government employees and pensioners follows a specific formula, which is as follows:
7th CPC DA% = [{12 month average of AICPI-IW (Base Year 2001=100) for the last 12 months – 261.42}/261.42×100]
Following a 4% increase in dearness allowance (DA) in the upcoming month, the combined dearness allowance and dearness relief are set to rise to 50%. The average Consumer Price Index for Industrial Workers (CPI-IW) over the past year is 392.83. According to this data, the Dearness Allowance (DA) is estimated to be 50.26% of the basic pay.
The state government has announced a raise in its contribution to the National Pension System (NPS) from 10 per cent to 14 per cent, with state employees being required to contribute 10 per cent, as stated in the official communication.
The Gujarat government has recently announced a 4% increase in dearness allowance (DA) and dearness relief (DR) for state government employees and pensioners. Additionally, the state government has decided to raise its NPS contribution by 4% and to calculate LTC cash conversion based on the 7th Pay Commission. With this latest DA hike, state government employees will now receive a dearness allowance of 46%, up from the previous 42%.
The increase is effective from July 1, 2023, and employees will receive arrears for the past eight months. Approximately 4.45 lakh state government employees and 4.63 lakh pensioners will benefit from this decision. The difference in dearness allowance for the period from July 1, 2023, to February 2024, will be distributed in three instalments along with salaries.
The arrears for July to September 2023 will be paid with the March 2024 salary, while arrears for October to December 2023 will be disbursed with the April 2024 salary. Furthermore, dearness allowance arrears for January and February 2024 will be included in the May 2024 salary for the employees.