7th Pay Commission Latest Updates: DA, DR Hike Likely By March Next Year; Who Gets What

The 7th Central Pay Commission is expected to hike both DA and DR, revise the fitment factor, as well as take a decision on settling arrears.

7th Pay Commission Latest Updates: DA, DR Hike Likely By March Next Year; Who Gets What
Rising inflation indicates that DA is likely to be hiked by the Union Government.

IN MARCH this year, the central government ratified increasing the dearness allowance (DA) by 3 per cent, taking it up to 34 per cent of the basic income.

Consequently, the government is expected to decide on the DA and DR (dearness relief), the fitment factor (the modification of basic pay by the specific element) revision and settling 18-month arrears.

DA and arrears

Both DA and DR are expected to be hiked by 3-5 per cent in March 2023, benefitting employees retrospectively from January 2023. 

Since DA is determined by the prevalent inflation rate, and since inflation itself is above 6 per cent, it is likely that DA will be hiked.

The decision to increase DA and DR is based on the twelve-monthly average of the consumer price index (CPI). The allowances are revised on this basis biannually in January and July. It should be noted though that the decision is generally announced in either March or September.

Revision of fitment factor

The fitment factor, which is a common value that is multiplied by the basic pay or salary as mentioned earlier, currently stands at 2.57. The 6th Central Pay Commission had set it to 1.68. Employees are demanding that this factor be rased to 3.68, which will raise the lowest pay from the current Rs 18,000 to Rs 26,000.

Arrears

Moreover, the issue of DA in arrears from January 2020 to June 2021 is also likely to be addressed. This works out to a total of 18 months. The amount in arrears depends on the structure and pay band of the employees.

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