The central government has recently announced an increase in the Dearness Allowance (DA) for employees under the Sixth Pay Commission. Their DA has been raised by 7%, bringing it to 246%. Meanwhile, employees who are still governed by the Fifth Pay Commission have seen their DA increase by a substantial 12%, reaching 455%. This hike comes after the Seventh Pay Commission employees also witnessed an increase in DA just before the Kali Puja.
Many states have followed the Centre’s lead and increased the DA for their employees in recent months. However, government employees in West Bengal are still awaiting any such announcements. Now, speculation is growing that the central government may increase DA again by January 2024. How much can employees expect this time?
How DA is Calculated and Potential Increase in January 2024
Dearness Allowance (DA) for government employees is closely tied to the All India Consumer Price Index (CPI). The CPI index tracks inflation and is used to determine the rate at which DA increases for government employees. According to recent reports, the CPI increased by 0.7 points in September 2024, taking the overall index to 143.3 points. For comparison, in July 2024, the CPI was at 142.7, and in August, it had slightly dropped to 142.6.
If this trend continues, experts predict that the DA for central government employees could rise by 54%. This would mean an increase in the allowance by approximately 1% based on the current CPI growth. However, the final DA increase will depend on the CPI for October, November, and December, as the index will directly impact the final hike.
What This Means for Employees
The CPI growth suggests a steady rise in inflation, which is directly linked to the increase in DA. Government employees are eagerly waiting for the official announcements regarding the DA hike in January 2024. If the expected increase occurs, employees will see a significant boost to their salaries, helping them cope with rising costs.
Eight Pay Commission and Upcoming Discussions
In addition to the potential DA hike, another major development is the ongoing discussions about the formation of the 8th Pay Commission. Multiple reports have suggested that a final decision on the 8th Pay Commission could be made this month. A Joint Consultative Machinery (JCM) meeting, which includes representatives from both the government and central employees, is expected to take place in November 2024. If the meeting concludes with an agreement, the government may announce the formation of the 8th Pay Commission in the upcoming budget for the next fiscal year.
A Look Back at the 7th Pay Commission
The 7th Central Pay Commission’s recommendations were implemented by the government on January 1, 2016. The proposed minimum monthly salary was initially set at ₹26,000, but this was later rejected. Instead, the government set the minimum salary at ₹18,000, reflecting a more conservative approach.
With the expected rise in the All India Consumer Price Index, the DA hike for central government employees in January 2024 is highly anticipated. The increase will provide some relief to employees battling rising inflation. Additionally, the possibility of the 8th Pay Commission being formed in the near future offers further hope for a comprehensive revision of government salaries.