7th Pay Commission: Government may soon increase DA from July 2023

The Central Government employees and pensioners have recently got a 4 per cent increase in their Dearness Allowance (DA) and Dearness Relief (DR), respectively. The revised rates have been applicable from 1 January 2023.

Following the adjustment, the employees are looking forward to another DA increment, which is anticipated to take place in July 2023. As per the media outlets, experts predict that the DA, calculated based on the 7th Pay Commission, may rise by 3 to 4 per cent starting from 1 July 2023.

They anticipate that even if the index number stays at 132.7 points and doesn’t change in the upcoming months, the DA will still increase by a minimum of 3 per cent, resulting in a total of 45 per cent DA.

The DA rate is decided by the government based on data provided by the All-India Consumer Price Index for Industrial Workers (AICPI-IW), which is published by the Labour Bureau, a department under the Ministry of Labour and Employment. These figures are released by the department on the final working day of the following month.

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At present, the DA/DR ratio for employees and pensioners stands at 42 per cent. The latest report by The Financial Express suggests that based on the AICPI-IW data for February 2023, it may increase to 45 per cent in the next revision. However, confirmation of the expected DA/DR rate for July 2023 is subject to the release of AICPI-IW data for the months leading up to July, which are March, April, May, and June 2023.

The DA is given to employees along with their basic pay, which is computed using the 7th Pay Commission Pay Matrix at the corresponding level. However, it does not include any other form of special remuneration, among other things.

Meanwhile, the Finance Ministry has raised the DA rate for Central Government and Central Autonomous body employees who receive their salary as per the 6th Pay Commission scale/Grade Pay from 212 per cent to 221 per cent of their Basic Pay, effective from 1 January 2023. This was notified by an Office Memorandum issued by the Department of Expenditure, under the Ministry of Finance on 10 April 2023.

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