Business & Economy

7th Pay Commission: Significant Surge in Dearness Allowance as AICPI Index Climbs by 2.50%, Latest Data Revealed.

The latest update on the Dearness Allowance (DA) for central employees under the 7th Pay Commission brings promising news. The recently released figures by the Labor Bureau indicate a notable rise in the DA, although the increase won’t be factored in immediately. As of now, there’s a 2.50 percent rise in the DA, but the actual implementation of this hike is lined up for January 2024.

The key metric driving this change is the All-India Consumer Price Index (AICPI), which saw a decline of 1.7 points from August’s 139.2 to 137.5 in September. Despite this decline, the DA has risen to 48.54 percent from the previous 47.98 percent. However, the final calculation of this figure will await data collection until December 2023. The upward trajectory of the inflation index strongly suggests that the DA might surpass the 50 percent mark by January 2024.

For central employees, this development marks a significant leap in their allowances, with the current rate resting at 46 percent following a recent 4 percent increment announced by the government. The subsequent revision in January 2024 will reveal the updated figures, but initial indications from July 2023 showcase that the DA is already reaching 48.54 percent.

However, there’s speculation surrounding what happens when the DA crosses the 50 percent threshold. Reports suggest that if the DA surpasses 50 percent, the allowance could potentially drop to zero. This means that the calculation would reset, starting from zero, and any amount exceeding 50 percent would be amalgamated into the basic salary. This adjustment was implemented by the government with the inception of the 7th Pay Commission in 2016. Consequently, the revision to zero beyond 50 percent DA would result in addition of the excess 50 percent to the basic salary.

The anticipation surrounding this possibility highlights the potential impact it could have on central employees’ earnings. The next few months leading up to January 2024 will be crucial in determining the final numbers and the subsequent implications for their allowances.

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