Central govt employees can expect to receive clarity regarding an increase in dearness allowance (DA) for the first half of 2023 on January 31, 2023.
The AICPI numbers, a crucial factor in determining the hike in DA, is released on the last day of each month. The December 2022 figure will be announced on January 31 and will be used to determine the final DA increase for central employees.
The official announcement for an increase in dearness allowance (DA) for the first half of 2023, covering the period from January to June, will be made in March 2023. However, the final numbers for the DA hike will be determined by the end of January 2023, as the DA calculation is based on the All India Consumer Price Index (AICPI) numbers.
The Ministry of Labour increases the dearness allowance to counteract inflation, as reflected in the index.
As of November 2022, the index number stands at 132.5. Based on this, a 3 per cent increase in dearness allowance for central government employees is expected. However, if the index numbers remain stable in December, the dearness allowance will increase by 3 per cent only.
If there is a 1 point increase in the December figure, the DA hike could potentially increase to 4 per cent, though the likelihood of this is low.
Experts predict that the December Consumer Price Index (CPI) inflation numbers, which were released on January 12, show a decrease in retail inflation to a 1-year low of 5.72 per cent in December, compared to 5.88 per cent in November.
As the retail inflation decreased in November, the All India Consumer Price Index (AICPI) also remained stable at 132.5 points in November, the same as October 2022. Therefore, experts expect that the AICPI for December 2022 will also remain stable. Even if there is a small change in the index, the DA hike will be 3 per cent.
If the December 2022 index remains unchanged, the DA for central employees will increase by 3 per cent, bringing the total DA to 41 per cent under the 7th Pay Commission. Currently, central employees receive a 38 per cent DA since July 2022. For example, an employee with a basic salary of Rs 18,000 would receive Rs 6,840 per month as DA.
