How much will your salary increase? 5 points
The Union cabinet on Wednesday approved a 34% allowance (DA) for central government employees and cost relief for pensioners. The decision to increase the DA by 3% will be effective on January 1, 2022.
The new dearness allowance rate will now be 34% compared to 31% previously.
This DA increase is in line with the accepted formula, which is based on the recommendations of the 7th Central Wage Commission.
How to calculate DA
The DA will be calculated on the basis of the All India Consumer Price Index for the months of 2021.
The DA for central government employees was previously calculated based on the consumer price index with the base year 2001. The government replaced it with a new consumer price index with the base year 2001. base year 2016 to calculate the DA from September 2020.
This linkage factor will be used to determine the cost allowance for central government employees and retirees. The core consumer price index 2016=100 for the month of January 2021 of 118.2 can be converted to core CPI 2001=100 by multiplying it by the linkage factor.
DA with effect from January 1, 2022 =[(340+343+344+346+347+350+354+354+355+360+362+361)/12]-(261.4)X100/261.4]
AD increase calculation: how much your salary will increase
If a central government staff member obtains ₹18,000 each month, the DA in his salary will increase by 3%. With 34% DA, the employee will see a jump of ₹6,120 in monthly salary.
The DA is linked to the base salary. Thus, an increase in DA will also increase the monthly amount of the provident fund (PF) and the gratification of the employees of the central administration.
Here are 5 things to know about DA hiking
1. The Cabinet has announced that the combined impact on the Treasury due to both the high cost allowance and the high cost relief will be ₹9,544.50 crore per year. The new rate will be applicable from January 1, 2022, specifies an official press release after the Council of Ministers.
2. “This increase is in line with the accepted formula, which is based on the recommendations of the 7th Central Salaries Commission,” the Cabinet said.
3. The DA hike will benefit about 47.68 lakh central government employees and 68.62 lakh pensioners.
4. The dearness allowance designates an allowance paid by the government to its employees as well as to retirees to limit the impact of inflation.
5. The government had temporarily halted these allowances in 2020 due to a shortfall in revenue collection after the coronavirus pandemic devastated the economy.
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