The central government employees are likely to get some good news from the Centre about announcement on dearness allowance (DA) hike before Holi. The central government employees, are also waiting with a baited breath for the dearness allowance (DA) and dearness relief (DR) arrears, and housing rental allowance (HRA), among other issues.
While the government hasn’t officially announced much as of now, it is expected that the official updates could come soon, especially with the Budget session 2022 in progress.
Their have been multiple reports around increase in dearness allowance by up to 3 per cent. It has gained further momentum after the announcement of All India Consumer Price Index and after the presentation of the Union Budget 2022 by finance minister Nirmala Sitharaman, Zee News said in it?s report.
The government?s announcement on DA hike will be based on the recommendation of the 7th Pay Commission. Currently, the central employees get dearness allowance of 31 per cent, and hence a further increase of dearness allowance by 3 per cent, will take the total dearness allowance to 34 per cent.
Dearness Allowance is calculated by multiplying it by the basic salary. As per the calculation of Dearness Allowance, the government keeps changing the DA after every 6 months or so, which in result increases the salary of the employees so as to tackle inflation. In October last year, DA was hiked from 28 per cent to 31 per cent.
What is DA?
Dearness Allowance is paid by the government to its employees as well as a pensioner to offset the impact of inflation. The effective salary of government employees requires constant enhancement to help them cope up with the increasing prices. The central government revises DA and DR benefits twice in a year ? January and July. DA varies for all employess based on whether they work in the urban sector, semi-urban sector or the rural sector.
DA Calculation?
The formula to calculate the dearness allowance was changed in 2006 by the Government. Presently, for central government employees, DA is calculated as under: Dearness Allowance percentage = ((Average of AICPI (Base Year 2001=100) for the past 12 months -115.76)/115.76) x 100. Here, AICPI stands for All-India Consumer Price Index.
Impact on HRA ? Explained
As reported by Zee News, in further cheer to 50 lakh central government employees and 61 lakh pensioners, the government is also likely to make announcements regarding hike the House Rent Allowance (HRA).
HRA is currently paid at 24 per cent, 16 per cent and 8 per cent for A, B & C cities respectively. Therefore, HRA not to be less than Rs 5400, Rs 3600 and Rs 1800 for A, B and C cities, calculated at 30 per cent, 20 per cent and 10 per cent of basic pay of Rs 18,000. But this however is only possible when DA will be beyond 50 per cent. Because according to the old order of the government, if the DA crosses 50 per cent, then the HRA will be 30 per cent, 20 per cent and 10 per cent.
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