7th Pay Commission: After January, now the dearness allowance of central employees is expected to increase in July. Earlier, the Ministry of Labor has changed the method of calculation for dearness allowance. The Ministry has made changes in the base year 2016 for Dearness Allowance (DA Calculation).
7th Pay Commission: If you yourself or any member of your household is a central employee, then this news is of your use. A new update has come regarding the Dearness Allowance (DA) of central employees.
After January, now the Dearness Allowance (DA) of the employees is to be increased in July. If we look at inflation and AICPI Index, then the DA is expected to increase by 5 percent. This is the first time after the year 2019 that there will be a jump of 5 percent in DA.
At present 34 percent DA is
This time (in July) the formula for DA calculation will change. After the announcement of increasing dearness allowance in March, the DA of employees increased from 31 percent to 34 percent. Now the next Dearness allowance of July is in great discussion. The AICPI Index is increasing continuously. In such a situation, it is expected that a new formula will be applied for the calculation of dearness allowance.
New formula will calculate
The Labor Ministry has changed the method of calculation for Dearness Allowance. The ministry has made changes in the base year 2016 for Dearness Allowance (DA Calculation). Under this, a new series of Wage Rate Index (WRI-Wage Rate Index) has been released. It was told by the ministry that the new series of WRI with base year 2016=100 will replace the old series of base year 1963-65.
This is how dearness allowance is calculated
At present, the amount of dearness allowance is worked out by multiplying the current rate of DA of 7th Pay Commission with the basic pay. For example, if DA is 34% and your basic pay is Rs 56,900, then your DA will be (56,900 x 34)/100. Similarly, Percentage of Dearness Allowance = Average of CPI for the last 12 months – 115.76. The average that will come will be divided by 115.76. The number that comes up will be multiplied by 100.
calculate salary
For calculation of salary as per 7th Pay Commission, DA has to be calculated on basic salary. For example, if the basic salary of a central employee is Rs 25,000, then his DA calculation will be 34% of 25,000. 34% of Rs 25,000 would be Rs 8500. This is an example, those with the rest of the salary structure can also calculate it.
How many types of dearness allowance are there?
There are two types of Dearness Allowance (DA). First Industrial Dearness Allowance and second Variable Dearness Allowance. The Industrial Dearness Allowance changes every 3 months. This is for the employees working in the public sector of the center. It is calculated on the basis of Consumer Price Index (CPI). The Variable Dearness Allowance is revised every 6 months.
