7th Pay Commission: Big Increase in Central Employees’ DA After 30 Days, Salary to Rise if Rate Hits 55%

Sadik Shaikh
11 Min Read

C. Sreekumar, a member of the National Council (JCM) on the staff side and the General Secretary of the All India Defence Employees Federation (AIDEF), stated that the current DA rate for employees is 50%. This will see an increase of 4% starting from July 1st.

Over one crore employees and pensioners in the central government received a 4% increase in the Dearness Allowance (DA) payable from January 1st. This increase raised the current DA rate from 46% to 50%. Now, after 30 days, starting from July 1st, central government employees will receive another increase in DA. According to government sources, this time the DA rate will reach 54% or 55%. If the new central government increases the DA by 4% or 5%, employees will see a significant rise in their salaries.

How Much Benefit If DA Reaches 54%

Example Calculations:

  • For an employee with a basic salary of ₹18,000:
    • Current DA at 50%: ₹9,000
    • DA at 54%: ₹9,720
    • Monthly increase: ₹720
  • For an employee with a basic salary of ₹25,000:
    • Current DA at 50%: ₹12,500
    • DA at 54%: ₹13,500
    • Monthly increase: ₹1,000
  • For an employee with a basic salary of ₹35,000:
    • Current DA at 50%: ₹17,500
    • DA at 54%: ₹18,900
    • Monthly increase: ₹1,400
  • For an employee with a basic salary of ₹45,000:
    • Current DA at 50%: ₹22,500
    • DA at 54%: ₹24,300
    • Monthly increase: ₹1,800
  • For an employee with a basic salary of ₹52,000:
    • Current DA at 50%: ₹26,000
    • DA at 54%: ₹28,080
    • Monthly increase: ₹2,080
  • For an employee with a basic salary of ₹70,000:
    • Current DA at 50%: ₹35,000
    • DA at 54%: ₹37,800
    • Monthly increase: ₹2,800
  • For an employee with a basic salary of ₹85,500:
    • Current DA at 50%: ₹42,750
    • DA at 54%: ₹46,170
    • Monthly increase: ₹3,420
  • For an employee with a basic salary of ₹1,00,000:
    • Current DA at 50%: ₹50,000
    • DA at 54%: ₹54,000
    • Monthly increase: ₹4,000

How Much Increase If DA Reaches 55%

Example Calculations:

  • For an employee with a basic salary of ₹18,000:
    • Current DA at 50%: ₹9,000
    • DA at 55%: ₹9,900
    • Monthly increase: ₹900
  • For an employee with a basic salary of ₹25,000:
    • Current DA at 50%: ₹12,500
    • DA at 55%: ₹13,750
    • Monthly increase: ₹1,250
  • For an employee with a basic salary of ₹35,000:
    • Current DA at 50%: ₹17,500
    • DA at 55%: ₹19,250
    • Monthly increase: ₹1,750
  • For an employee with a basic salary of ₹45,000:
    • Current DA at 50%: ₹22,500
    • DA at 55%: ₹24,750
    • Monthly increase: ₹2,250
  • For an employee with a basic salary of ₹52,000:
    • Current DA at 50%: ₹26,000
    • DA at 55%: ₹28,600
    • Monthly increase: ₹2,600
  • For an employee with a basic salary of ₹70,000:
    • Current DA at 50%: ₹35,000
    • DA at 55%: ₹38,500
    • Monthly increase: ₹3,500
  • For an employee with a basic salary of ₹85,500:
    • Current DA at 50%: ₹42,750
    • DA at 55%: ₹47,025
    • Monthly increase: ₹4,275
  • For an employee with a basic salary of ₹1,00,000:
    • Current DA at 50%: ₹50,000
    • DA at 55%: ₹55,000
    • Monthly increase: ₹5,000

Demand for 8th Pay Commission to be Presented to New Government

C. Sreekumar, a member of the National Council (JCM) on the staff side and the General Secretary of the All India Defence Employees Federation (AIDEF), stated that the current DA rate for employees is 50%. This rate will increase by 4% starting from July 1st. Inflation is continuously rising, and while there might be slight variations month-to-month, the chart for the period from January 2024 to June 2024 indicates that a minimum 4% increase in DA/DR is certain. Following the results of the Lok Sabha elections, the demand for the formation of the 8th Pay Commission will be presented to the central government.

Inflation in Rural and Urban Areas in March and April

Annual Inflation Rate Based on CPI

The annual inflation rate based on the All India Consumer Price Index (CPI) for April 2024 was 4.83% (final), higher than in April 2023. The inflation rates for rural and urban areas were 5.43% and 4.11%, respectively. The CPI for January, February, and March 2024 were 5.10%, 5.09%, and 4.85%, respectively. Year-on-year inflation for key groups like ‘Clothing and Footwear’, ‘Housing’, and ‘Fuel and Light’ decreased compared to the previous month.

CPI and CFPI Details for April 2024

In April 2024, the CPI (general) stood at 5.43% for rural areas and 4.11% for urban areas, with a combined rate of 4.83%. The Consumer Food Price Inflation (CFPI) for rural areas was 8.75% and for urban areas 8.56%, resulting in a combined rate of 8.70%. In March 2024, the CPI (general) was 5.51% in rural areas and 4.14% in urban areas, with a combined rate of 4.85%. The CFPI for March 2024 was 8.75% in rural areas and 8.56% in urban areas, with a combined rate of 8.70%.

Index Status for Rural and Urban Areas

For April 2024, the CPI (general) index was 188.5 for rural areas, 184.7 for urban areas, and 186.7 combined. The CFPI index was 188.9 for rural areas and 195.4 for urban areas, with a combined index of 191.2. In March 2024, the final CPI (general) index was 187.8 for rural areas, 183.6 for urban areas, and 185.8 combined. The CFPI index was 187.8 for rural areas and 193.4 for urban areas, with a combined index of 190.8.

Data Collection and Response Rate

Price data is collected by the field staff of the NSO, MOSPI through personal visits to 1114 urban markets and 1181 villages across all states and union territories on a weekly roster. For April 2024, the NSO collected prices from 99.9% of villages and 98.5% of urban markets, with market-wise prices collected from 89.8% of rural and 93.2% of urban markets.

CPI-IW in December 2023

The All India CPI-IW, released by the Labour Bureau of the Ministry of Labour and Employment on January 31, 2024, showed a decrease of 0.3 points to 138.8 in December 2023. This was a 0.22% decrease compared to the previous month, while the year-on-year change was a 0.15% decrease. The index is compiled based on retail prices collected from 317 markets across 88 important industrial centers in the country.

CPI-IW in January 2024

For January 2024, the All India CPI-IW increased by 0.1 points to 138.9, a 0.07% rise compared to December 2023, while it had increased by 0.38% in the same month the previous year. The index is released on the last working day of the subsequent month.

Contributions to Index Increase

The increase in the current index was mainly due to the ‘Housing’ group, contributing 0.48 percentage points to the total change. The increase was due to higher prices of house rent, ladies’ suiting, casual wear, cotton sarees, woolen sweaters/pullovers, plastic/PVC shoes, tailoring/embroidery charges, tobacco, foreign/refined liquor, pan masala, etc. However, prices of onions, potatoes, tomatoes, eggplants, ginger, peas, cabbage, cauliflower, French beans, okra, bananas, grapes, papayas, pomegranates, fresh coconut, kerosene, and charcoal helped moderate the index increase.

Regional Variations

Rani Ganj recorded the highest increase of 4.2 points, followed by Ramgarh with a 2.5-point increase. Seven other centers showed an increase of 1 to 1.9 points, while 38 centers recorded an increase of 0.1 to 0.9 points.

Decreases in Guwahati and Tripura

Conversely, Guwahati and Tripura recorded the maximum decrease of 1.7 points. Seven other centers recorded a decrease of 1 to 1.4 points, while 30 centers showed a decrease of 0.1 to 0.9 points. The index remained steady at two centers. Year-on-year inflation for January 2024 was 4.59%, compared to 4.91% in December 2023 and 6.16% in January 2023. Similarly, the food inflation rate was 7.66% in January 2024, down from 8.18% in December 2023, but higher than the 5.69% recorded in January 2023.

Disclaimer:

The information provided in this article is based on publicly available data and sources deemed reliable. However, it is intended for informational purposes only and should not be considered as financial or investment advice. The article does not constitute an endorsement or recommendation of any specific financial product, strategy, or course of action.

Readers are advised to conduct their own research and consult with a qualified financial advisor or economist before making any financial decisions. The author and publisher of this article make no representations or warranties regarding the accuracy, completeness, or reliability of the information presented. They shall not be held liable for any errors, omissions, or damages arising from the use of the information provided herein.

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