DA Hike: AICPI index confirms! 4% increase in DA from July 2023, know how much will the money increase?

DA Hike: In some reports regarding the dearness allowance (DA) of central employees, it was claimed that it would increase by 3 percent. That means the current rate will increase from 42 percent to 45 percent. But, this is a baseless claim. Let’s know why?

DA Hike: There is good news for central employees. The wait for DA Hike, which is going to increase from July 2023, is going to end soon. A decision on this can be taken by the government in the month of September. After the arrival of the numbers of AICPI index, it is indicated that how much will increase in their dearness allowance. But, it is decided by the government and after approval from the cabinet, it is taken forward. There is a state of confusion for the last few days. In some reports regarding the dearness allowance (DA) of central employees, it was claimed that it would increase by 3 percent. That means the current rate will increase from 42 percent to 45 percent. But, this is a baseless claim. Let’s know why?

Actually, Dearness Allowance (DA) is decided on the basis of monthly numbers of All India Consumer Price Index (AICPI). The number of dearness allowance applicable from July 2023 is decided by the AICPI index from January to June. If we look at the trend of numbers for six months, then it is certain that dearness allowance has to be increased by 4 percent. Take a look at the calculation given below. In such a situation, the talk of an increase of 3 percent seems wrong. However, the final decision rests with the government. But, until it gets approval from the cabinet. Till then it is too early to say anything.

No confusion, only 4 percent is correct

A situation of confusion has arisen for the central employees. A few days ago a report came that there would be a revision of 3 per cent in his dearness allowance. But, from where this 3 percent calculation came, the reason behind it is not clear. If we look at the calculation, it is confirmed that this time also a jump of 4 percent will be seen in the dearness allowance.

How will DA be calculated?

According to experts, in July 2023, dearness allowance will not increase by less than 4 percent. The logic behind this is that due to the movement shown in the price index ratio, the DA score has crossed 46 per cent. In June, the number of the index was 136.4 points. If you see the calculation on the basis of this, DA Score has reached 46.24. This means that there will be a total increase of 4% in DA. Because, DA is given in round figure and if it is less than 0.51 then it will be considered as 46 percent only.

Now understand this calculation

The index number in December 2023 was 132.3 points, making the total DA score 42.37 per cent. After this, the index reached 132.8 in January and the DA score increased to 43.08. Similarly, the score of every month is decided. see calculation below

Guaranteed 46 percent dearness allowance

If we look at the calculation given above, then once again there will be an increase of 4 percent under the 7th Pay Commission. With this, the total dearness allowance will increase to 46 per cent. It will be implemented from 1 July 2023. However, we will have to wait a bit for its announcement. It can be announced in late September or early October. The arrears (DA Arrears) will be given to the central employees from July until it is announced.

How much will the money increase?

• Basic salary of the employee – Rs 18,000
• New Dearness Allowance (46%) – Rs.8280/month
• Dearness Allowance till date (42%) – Rs.7560/month
• By how much dearness allowance increased –  8280-7560= Rs 720/month
• Increase in annual salary-  720X12 = Rs 8640

Calculation on maximum basic salary of Rs.56900

1. Basic salary of the employee – Rs 56,900
2. New Dearness Allowance (46%) – Rs 26,174/month
3. Dearness Allowance till now (42%) – Rs 23,898/month
4. By how much dearness allowance increased – 26,174-23,898= Rs 2276/month
5. Increase in annual salary – 2276X12 = Rs 27312

Note: This is an estimated salary, the final salary will be made only after adding allowances like HRA.