After the 8th Pay Commission’s approval, government employees might soon receive more good news. An increase in their Dearness Allowance (DA) may be announced soon. This will benefit both government employees and pensioners. Let’s find out how DA, or Dearness Allowance, is calculated and when it can be announced.

How is DA Calculated?

Government employees’ salaries are currently under the 7th Pay Commission. DA is calculated based on the All India Consumer Price Index (AICPI). The AICPI data from July to December 2024 will determine the DA increase. This data suggests that the government may increase DA by 3%.

Calculation:

  1. Base Salary: The basic pay of the employee.
  2. CPI: The Consumer Price Index for Industrial Workers (CPI-IW) is used.
  3. Fitment Factor: A multiplier applied to the basic pay.

The formula is:

DA=(Current CPI−Base CPIBase CPI)×Base Salary×Fitment Factor

When Will the DA Increase be Announced?

As of July 2024, government employees and pensioners are receiving a 53% dearness allowance. Historically, the government has announced DA hikes in March before Holi. If the March DA hike is announced, it will be effective from January 1, 2025, providing two months of DA arrears.

How Much Will the Salary Increase?

The salary increase depends on the current salary of government employees. The government may raise DA from 53% to 56%, adding 3% to the employees’ dearness allowance. For example, if an employee is currently receiving a DA of ₹15,000 per month, it will increase to ₹15,450, an addition of ₹450 per month.

When Will the DA Hike Money Arrive?

Under the 7th Pay Commission, DA is revised twice a year—in January and July—based on the AICPI average. The government may announce the DA hike before Holi, treating it as a festive gift to employees and pensioners. If announced in March, the increased DA money will likely come with March or April’s salary.