7th Pay Commission latest news: With the second Dearness Allowance (DA) revision of the year awaited, the formula for calculation of the allowance has been changed by the government. DA for central government employees and DR for pensioners will not be calculated with a new base year after revision by the Ministry of Labour and Employment, reported DNA affiliate Zee Business.
The base year is revised from time to time by the government with an eye on inflation. The new change in the formula will impact the salaries of central government employees and show on their wage pattern, it was reported.
The base year for DA calculation has been changed by the Union Ministry to 2016, it was reported. It has released the latest Wage Rate Index series. While the old series was based on the base year as 1963-65, the base year will be 2016=100.
The base year was revised by the National Statistical Commission (NSC) from 1963-65 to 2016 in order to broaden the scope and improve the wage rate index’s efficiency. This has been done in line with recommendations from the International Labour Organisation (ILO).
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DA calculation
The DA amount is calculated as a factor of current rate as per an employee’s basic pay as per 7th Pay Commission rules.
As per the current percentage rate of 12 percent, this calculation would be: (Basic Pay x 12)/ 100.
DA Percentage = 12-month CPI (Consumer Price Index) average - 115.76. The result will be divided by 115.76 and then multiplied by 100.
Meanwhile, with the 4 percent DA hike that central employees are set to receive, the DA figure will touch 38 percent
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