As suspense on DA hike gets clear, will THESE 4 allowances also be hiked?

New Delhi: Even as lakhs of government employees are waiting for announcement in DA hike, a few media reports are also doing the rounds that 4 other allowances that are decided based on the DA level, may also increase. Here’s the list.

1. The DA is proportional to the base wage. As a result, a raise in DA will also raise central government employees’ monthly provident fund (PF)

2. The gratuity amounts of the employees will also be increased due to the hike in DA.

3. The hike in dearness allowance has also cleared the path for hike in Travel/Transport Allowance and City Allowance of the employees. 

4. There have also been speculations in the media that the government is contemplating a hike in the HRA as the DA has been hiked.

7th Pay Commission DA hike Latest update

While lakhs of central government employees eagerly waiting for announcement on hike in Dearness Allowance (DA), some media reports are saying that it might soon be announced. The reason behind this brighter hope is the recent All-India CPI-IW data for the month of May.

The AICP Index, crucial factor in determining the DA, for the month of May points at the probability of increase in the DA of the central government. Government may bring in some more good news for the employees in the month of July. Now, if latest media reports are to be believed, Dearness Allowance of the employees could by hiked by 4 percent. This means the total DA could reach upo 38 percent.

The Dearness Allowance of central government employees is revised twice a year. The first is given from January to June, while the second comes from July to December.

The All-India CPI-IW for April, 2022 increased by 1.7 points and stood at 127.7 (one hundred twenty seven point seven). On 1-month percentage change, it increased by 1.35 per cent with respect to previous month compared to an increase of 0.42 per cent recorded between corresponding months a year ago, showed a Ministry of Labour & Employment data. As per latest ministry reports, the AICPI figures for May is at 129, which is hinting at certainity that the DA would be higher than expected, i.e 6 percent, several media websites are saying.

The first increase in dearness allowance for the year 2022 was announced in March. In December 2021, the AICPI figure stood at 125.4. But, in January 2022, it declined by 0.3 points and fell to 125.1. The All-India CPI-IW for February, 2022 decreased by 0.1 points and stood at 125.0 (one hundred twenty five). On 1-month percentage change, it decreased by 0.08 per cent with respect to previous month compared to increase of 0.68 per cent recorded between corresponding months a year ago. For the month of March, there was a jump of 1 point. The AICPI index figures for March stands at 126.

It may be recalled that the Union Cabinet had on March 30 hiked Dearness Allowance (DA) and Dearness Relief (DR) by 3 per cent to 34 per cent to compensate for the price rise, benefitting over 1.16 crore central government employees and pensioners.

The additional instalment is effective from January 1, 2022. The increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission.