7th Pay Commission: The central government may announce the Dearness Allowance (DA) for the Central Government employees after the Union Budget 2020 (#BUDGET2020ZEE). This time, central government employees are expecting their H1-2020 DA hike by at least 4 per cent. If the Central Government announces 4 per cent DA hike for the central government employees, there DA will jump from 17 per cent to 21 per cent. The DA hike announcement will benefit around 1.1 crore central government employees and pensioners. This DA hike will be announced on the basis of inflation rise during the period of July to December 2019.

Calculation behind DA hike

Central Government announced DA hike twice in a year. This DA hike is done on the basis of AICPI (All India Consumer Price Index) data for January to June and July to December. January to June AICPI inflation date is used for announcing July to December DA while July to December AICPI inflation data is used for announcing January to June DA for the central government employees. The 4 per cent DA hike is expected by the central government employees because as per the November 2019 AICPI inflation data has jumped up to 328 basis points.

Elaborating upon the DA calculations Harishankar Tiwari, Former Chairman at AG Office Brotherhood said, “In November 2019, AICPI inflation was at 328 basis points and if this AICPI date goes down by 12 points, only then the DA will go down below 4 per cent.” However, he said that the way essential commodities price were skyrocketing during December, chances of AICPI date going down by 12 points looks impossible. December 2019 AICPI data is expected to come today i.e. on 31st January 2020.

Salay hike expected

If the central government announces 4 per cent DA for its employees, the Level-1 central government employees will get around Rs 720 monthly salary hike. Apart from DA, they will get their Travel Allowance (TA) hike by the same percentage point as well. However, Cabinet Secretary level central government employees will get around Rs 10,000 monthly salary hike. It should be noted that the basic salary of the Level-1 central government employees is Rs 18,000 while for the Cabinet Secretary levels central government employees’ basic salary is Rs 2.5 lakh.