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| 7th Pay Commission: Big news for central employees, dearness allowance will be 55% on July 1! |
In a significant development for central government employees, the 7th Pay Commission has announced that the dearness allowance (DA) is set to rise to 55% from July 1, 2024. This increase is a part of the semi-annual adjustments that the government makes, with the last hike being effective from January 1. The January increment was a 4% increase, resulting in a DA of 50%. The expected increase for July is projected to be in the range of 4% to 5%, in response to inflationary pressures. While the formal declaration is likely to be made by September, the increment will be applied retroactively from July.
On January 1, 2024, the government sanctioned a 4% rise in DA, and it is anticipated that six more allowances for government employees will be revised upwards soon. The Department of Personnel and Training has been instructed to implement these allowances as per the Office Memorandum dated April 2, 2024. Post its 2016 review, the 7th Pay Commission has been responsible for assessing the benefits for central government workers, including those in railways, civilian defense, and defense sectors.
The allowances being considered for an increase are:
- Dearness Allowance
- House Rent Allowance (HRA)
- Transport Allowance
- Children Education Allowance
- Traveling Allowance during tours
- Deputation Allowance
- Fixed Medical Allowance for Pensioners
- Higher Qualification Allowance
- Leave Travel Encashment
- Leave Encashment
- Non-Practicing Allowance
Notably, when the DA hit the 50% mark, the government updated the HRA percentages to 30%, 20%, and 10% for cities classified as X, Y, and Z, respectively. This adjustment is up from the previous rates of 27%, 18%, and 9%. The HRA is allocated based on the city classification where the employees are stationed.
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