7th Pay Commission: The central government has recently announced a 3% increase in Dearness Allowance (DA) and Dearness Relief (DR) for its employees and pensioners. With this increase, DA has now reached 53%, which has become an important part of the basic pay. This has once again started the discussion whether DA will now be merged with the basic pay, as happened in 2004 when DA had increased to more than 50%. However, the government has denied any such change.

What is the calculation of DA?

DA, or Dearness Allowance, is an amount given to employees to cover the increased expenses due to inflation. It is increased twice every year, in January and July. DA is calculated based on the AICPI (All India Consumer Price Index), which measures inflation.

What will happen if DA and basic pay are combined?

In 2004, when DA was more than 50%, the government had linked it with the basic pay. This had set a precedent, which now raises the question of whether this will happen again. However, during the 6th Pay Commission, the government had made it clear that even when DA is 50% or more, it will not be included in the basic pay.

Why will DA not be added?

The government had made it clear in the 6th Pay Commission that DA will not be linked with the basic pay, even if the percentage of DA increases to more than 50%. This gives relief to the employees according to inflation, but the basic pay remains separate.

When will the next DA hike happen?

The next DA hike will be in March 2024, which will be effective from January 2024. Employees and pensioners will then get 2-3 months' arrears in their April and October salaries. These changes happen twice a year in March and September/October.

Although DA has now reached 53%, the government has made it clear that DA and basic pay will not be combined. DA is increased every six months to provide relief to employees, but it is not linked with basic pay.