Categories: BusinessNews

7th Pay Commission: Interest on EPF increased, now preparations are underway to increase dearness allowance and HRA of employees.

7th Pay Commission: The beginning of the year 2024 is very good for government employees. On one hand, Employees Provident Fund Organization (EPFO) has increased the interest rates on account deposits to 8.25 percent. Now, an increase in dearness allowance is being expected before the Lok Sabha elections. According to media reports, the government can give a big gift to the employees in the last week of this month or the first week of March. According to the agreement of the Seventh Pay Commission, the last time the government increased dearness allowance by four percent in the month of October. Similarly, this time also it is expected that dearness allowance will be increased by four percent.

HRA will also increase along with DA.

If the government increases the dearness allowance by four percent, then the total dearness allowance will become 50 percent. After this, as per the rules, the housing allowance of the employees will also increase. According to the agreement of the Seventh Pay Commission, when the dearness allowance exceeds 50 percent, then the house rent allowance also has to be increased. If reports are to be believed, this can be increased to 30 percent.

What is the mathematics of dearness allowance?

Dearness allowance of government employees is increased twice a year. Once in January and second time in July. If the government amends it later, then its benefit is given along with arrears. The formula of dearness allowance in India is calculated on the basis of inflation rate. The basis of inflation rate is usually the National Inflation Index (CPI). Based on this, the formula for dearness allowance is as follows: Dearness Allowance = [मौजूदा महंगाई सूचकांक (CPI) – पिछले साल का CPI] / Last year’s CPI * 100

Here, the Current Inflation Index (CPI) reveals the standard price position of real products and services during the current financial year and the previous year’s CPI reveals the standard price position of the previous financial year. Using this formula, dearness allowance is calculated based on the change or variation in the inflation rate in the market. This change usually varies for different sectors and occupations and is revised each year based on the latest current CPI.

Mayank

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