7th Pay Commission: 4% dearness allowance of employees will increase again! You will get the benefit of many allowances with arrears, check details

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Central Employees Pensioners and pensioners are going to get the gift of Diwali soon. The news is that the employees are going to get many gifts including dearness allowance and arrears by the end of September.

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The release of the figures of the AICPI-IW Index till July is considered to be an increase in 4% DA, which can be formally announced in the Modi cabinet meeting to be held on September 28. After this the total DA of the employees will increase from 34% to 38%.

It is expected that the benefit of increased DA can be made along with the salary of October along with arrears. In fact, recently the All India Consumer Price Index-Industrial Workers (AICPI-IW) has released the data for the first half of the current financial year. This index has registered a gain of 0.2 points, after which the July AICPI index has reached 129, so a 4 percent increase in DA is believed to be fixed.

If this is approved in the next cabinet meeting, then the total DA of central employees will become 38 percent. More than 1 crore employees will get its benefit. According to media reports, the new DA will be implemented from July 1, 2022. If the DA is 38 per cent and the minimum basic salary is Rs 18,000, then the total DA would be Rs 6,840 and the total profit would be Rs 720 per month.

On the other hand, a maximum of Rs 54,000 on basic pay, Rs 56,000 as DA will get Rs 27,312. In this, you will get a total benefit of Rs 2,276 per month. Along with this, arrears of 3 months will also be given. Apart from this, house rent allowance, travel allowance, provident fund, city allowance and gratuity can also be increased after the increase of DA. Actually, dearness allowance of central employees is increased twice a year. The central government increases the rates of dearness allowance based on the AICPI index. 

DA and DR for central government employees and pensioners were increased from 17 per cent to 28 per cent respectively in July 2021. After this, again in October 2021, the central government employees increased the dearness allowance by 3 per cent, after which the total Dearness Allowance increased to 31 per cent, with effect from July 2021. 

Now, from January 2022, DA and DR are being paid at the rate of 34 percent to the salaried people after the increase of 3 percent in the previous months. If now 4% more DA increases then it will total to 38%.

Benefits of 3 allowances and PF-gratuity will also be available

  • Monthly PF and gratuity of central employees is calculated from basic salary and DA, so if dearness allowance increases then PF and gratuity will also increase. Along with dearness allowance, employees can also be increased in House Rent Allowance, Travel Allowance, Provident Fund, City Allowance and Gratuity.
  • Travel allowance is divided into 3 sections on the basis of pay matrix level, in which cities and towns are divided into two categories. If we look at the formula for the calculation of TA, then Total Transport Allowance = TA + [(TA x DA% )\/100] .
  • The Labor Ministry has changed the formula for DA calculation in the base year 2016. A new series of WRI-Wage Rate Index has been released, which will replace the old series of base year 1963-65 with the new series of WRI with base year 2016=100 .

38% DA Hike Salary Calculation 

Calculation on minimum basic salary

1. Basic salary of the employee Rs 18,000
2. New dearness allowance (38%) Rs 6840/month
3. Dearness allowance so far (34%) Rs 6120/month
4. By how much dearness allowance increased 6840-6120 = Rs 1080/month
5 Increase in annual salary 720X12 = Rs 8640

Calculation on maximum basic salary

1. Basic salary of the employee Rs 56,900
2. New dearness allowance (38%) Rs 21,622/month
3. Dearness allowance so far (34%) Rs 19,346/month
4. How much dearness allowance increased by 21,622-19,346 = Rs 2260/month
5 2. Increase in annual salary 2260 X12 = Rs 27,120

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