7th Pay Commission Update: Expected Salary Boost for Govt Employees with DA Hike and HRA Benefits

7th Pay Commission Update: Expected Salary Boost for Govt Employees with DA Hike and HRA Benefits

In a potential boost for central government employees, there are indications that the 7th Pay Commission might bring about a significant increase in dearness allowance (DA) by 4 to 5 percent in the upcoming year.

Should this materialize, the DA could potentially reach the 50 percent mark. A corresponding adjustment in House Rent Allowance (HRA) may also be on the cards, as reported by Jagran.com.

This move, if implemented, would result in a notable salary increase for employees.

The HRA, a key component for those residing in rented accommodations, varies across different cities. Employees in tier-1 cities receive a higher HRA compared to their counterparts in tier-II or tier-III cities.

As of now, central government employees are receiving dearness allowance at a rate of 46 percent. The potential DA hike is expected to come into effect from January 2024, with an announcement anticipated before Holi.

Typically, the DA rate undergoes revision twice a year, in January and July, based on the biannual data of the AICPI index.

Notably, a total of 8 percent DA was increased in 2023. The current expectation among employees is a 4 percent or higher hike in dearness allowance.

Concerning House Rent Allowance, it is categorized into three segments based on the city’s population – X, Y, and Z. ‘X’ category covers areas with a population of 50 lakh and above, receiving 24 percent HRA. ‘Y’ category includes areas with a population between 5 lakh to 50 lakh, eligible for 16 percent HRA.

The ‘Z’ category encompasses areas with a population less than 5 lakh, offering 8 percent HRA.

Central government employees are keenly awaiting the official announcement regarding these potential developments, which could significantly impact their financial well-being in the coming year.