7th Pay Commission: Central government makes MAJOR changes in DA calculation

The Central government has made some changes to the Dearness Allowance (DA) calculation for Central government employees. The formula was recently revised by the Central Government’s Ministry of Labor and Employment.

The new WRI (Wage Rate Index) series, with the base year 2016=100 will replace the existing base year of 1963-65.

Base year changed by the Central government 

According to the recommendations by the International Labor Organization (ILO), the National Statistical Commission changed the base year from 1963-65 to 2016 to widen the scope and improve the index’s efficiency. The government changes the base year periodically for important economic metrics on the basis of inflation data. 

How is Dearness Allowance (DA) calculated?

The DA is revised two times a year between January and July. The Dearness Allowance is calculated by multiplying the current rate of dearness allowance by the base wage.

What is Dearness Allowance (DA)?

Dearness Allowance (DA) is given to employees by the Central government to help with their living expenses. The money is given so that employees living standards are not affected because of the growing inflation. The money is given to government workers, public sector employees, and pensioners.

In other news, it was recently reported that the Central government is reflecting on an increase in the House Rent Allowance (HRA) of employees after receiving requests from lakhs of employees. 

The request for the same was done by the Indian Railway Technical Supervisors Association (IRTSA) and the National Federation of Railwaymen (NFIR). Both the organisations are obliging an increase in HRA from January 1.