7th Central Pay Commission: Post Budget 2023, Centre to hike DA by 3 percent

The minimum salary of government employees salaries is expected to be increased after the presentation of the Union Budget 2023 on February 1 by Finance Minister Nirmala Sitharaman.

According to reports, it is believed that the government may revise the fitment factor of the government employees salaries. As of now the common fitment factor stands at 2.57

The government employees have been demanding the government to hike the fitment factor to 3.68. The increase will raise the wage from Rs 18,000 to Rs 26,000 as per a Zee News report.

If the government increases the fitment factor 3 times, then the salary of the employees excluding allowances will be 18,000 X 2.57 = Rs 46,260. At the same time, if the demands of the employees are accepted, then the salary will be 26000 X 3.68 = Rs 95,680. If the government accepts 3 times fitment factor, then the salary will be 21000 X 3 = Rs 63,000.

The Union Cabinet had on 28 September 2022, approved the release of additional instalment of Dearness Allowance and Dearness Relief @ 4 percent to Central Government employees and pensioners due from 01.07.2022 based on the percentage increase in 12 monthly average of All India Consumer Price Index for the period ending June, 2022.

The additional financial implications on account of this increase of Dearness Allowance to Central Government employees are estimated at Rs.6,591.36 crore per annum; and Rs.4,394.24 crore in the financial year 2022-23 (i.e. for a period of 8 months from July, 2022 to February, 2023).

The additional financial implications on account of this increase of Dearness Relief to pensioners are estimated at Rs.6,261.20 crore per annum; and Rs.4,174.12 crore in the financial year 2022-23 (i.e. for a period of 8 months from July, 2022 to February, 2023).

The Budget 2023 is set to be presented on February 1, along with the Budget Speech by Finance Minister Nirmala Sitharaman. The budget session of Parliament will start on January 31.

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.