DA Hike In 2023
Fitment Factor To Be Revised
Employee unions have been demanding the revision of fitment factor in their salaries. The fitment factor is a common value which is multiplied by the basic pay to arrive at the total salary of the employees. Currently, the
common fitment benefit for all groups of central government employees is 2.57. Now, if somebody is getting a basic pay of Rs 15,500 in 4200 Grade Pay, his total pay will be Rs 15,500×2.57 or Rs 39,835.
The 6th CPC had recommended the fitment ratio at 1.86. Now, employees are demanding the government to raise it to 3.68, according to media report. The hike will raise the minimum wage from Rs 18,000 currently to Rs 26,000.
How Is DA Hike Decided?
The government decides on the hike in DA based on the inflation rates in the country. If the inflation is high, the chances are that the DA will be hiked more. In the current scenario, in India, the retail inflation is above the RBI’s comfort zone of 2-6 per cent for the past 10 months. This may prompt the government to allow more hikes in salaries.
The DA and DR hike is decided based on the percentage increase in 12 monthly average of the All India Consumer Price Index (AICPI) for the period ending June 2022. Though the central government revises the allowances on January 1 and July 1 every year, the decision is generally announced in March and September.
In March, the Union Cabinet had approved to increase 3 per cent in DA under the 7th Pay Commission, thus taking the DA to 34 per cent of the basic income. In 2006, the central government had revised the formula to calculate the DA and DR for central government employees and pensioners.
Dearness Allowance Percentage = ((Average of All-India Consumer Price Index (Base Year 2001=100) for the past 12 months -115.76)/115.76)x100.
For Central public sector employees: Dearness Allowance Percentage = ((Average of All-India Consumer Price Index (Base Year 2001=100) for the past 3 months -126.33)/126.33)x100.