New Delhi: 7th Pay commission: The Union Cabinet on March 30 hiked Dearness Allowance (DA) and Dearness Relief (DR) by 3 per cent to 34 per cent to compensate for the price rise, benefitting over 1.16 crore central government employees and pensioners.
The additional instalment will be effective from January 1, 2022. The increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission. With the recent announcement, the hope for the next DA hike, which usually is stipulated for the month of July, has also taken pace. However, one bad news could be that the DA hike, scheduled for July may not be announced.
Why DA increase does not seem to be happening in July?
The Dearness Allowance of central government employees is revised twice a year. The first is given from January to June, while the second comes from July to December. Now that the first increase in dearness allowance for the year 2022 has been announced in March, some media reports state that it is unlikely that the second revision would come in July. The reason being that January and February AICPI index figures, that is instrumental in DA revision decision, have come. Compared to December 2021 figures, there has been a decline for two consecutive months.
All-India CPI-IW figures in last three months
In December 2021, the AICPI figure stood at 125.4. But, in January 2022, it declined by 0.3 points and fell to 125.1. The All-India CPI-IW for February, 2022 decreased by 0.1 points and stood at 125.0 (one hundred twenty five). On 1-month percentage change, it decreased by 0.08 per cent with respect to previous month compared to increase of 0.68 per cent recorded between corresponding months a year ago.
After two consecutive months of decline, this figure indicates that there will be no decline from the current DA. However, the AICPI figure falls further and goes below 124.7, then there could be a halt in DA raise. A figure at 124 level may mean that DA is kept at constant level. Zeebiz reports, citing experts said that it is also highly unlikely that there will be any reduction in DA.
DA hike in July impossible?
However, the possibilities of DA hike in July 2022 cannot be completely debunked. It is because the numbers for March, April, June are yet to come. If the AICPI index shows higher in graph during this period, then there will definitely be an increase in dearness allowance. Also, it is too early to predict the figures at the moment.
The next issue of CPI-IW for the month of March, 2022 will be released on Friday, 29th April, 2022.
