DA hiked to 53%: Will other allowances see a boost under 7th Pay Commission? Check details

Diwali boost: The Centre has recently hiked the dearness allowance (DA) by 3% for central government employees. The Union Cabinet on October 16, 2024, approved an additional installment of Dearness Allowance (DA) to Central government employees and Dearness Relief (DR) to pensioners to compensate price rise. The emoluments will be effective July 1 amounting to an increase of 3% over the existing rate of 50% of the basic pay/pension to adjust the cost of living and to protect erosion of the pay’s real value. 

Dearness Allowance (DA) is a percentage of an employee's basic salary intended to mitigate the effects of inflation on their living expenses. This allowance is regularly adjusted, typically every six months, to correspond with fluctuations in the cost of living index.

Along with hike in dearness allowance, the government also raises a set of linked allowances. These allowances are: 

1) House rent allowance or HRA
2) Touch location allowance
3) Conveyance allowance
4) Special allowance for children of women with disabilities
5) Children's education allowance
6) Hotel accommodation
7) Reimbursement of travelling charges for travel within the city (touring station)
8) Reimbursement of food charges/lump sum amount or daily allowance or journeys performed by own car/taxi, auto rickshaw, own scooter etc. at the place where no specific rate has been prescribed by the director of transport of concerned state or the neighbouring state
9) The rate of transportation of personal effects by road on transfer, etc.
10) Dress allowance,
11) Split duty allowance
12) Deputation (duty) allowance

Will these allowances see a hike now?

According to the guidelines of the 7th Pay Commission (7th CPC) approved by the central government, the allowance rates will be raised to 24 percent once the Dearness Allowance (DA) reaches 50 percent of the basic salary. This regulation, aimed at guaranteeing equitable remuneration, underscores our dedication to your welfare and protection during these difficult circumstances. So, will these allowances see a hike?

Vishal Gehrana, Principal Associate, Karanjawala & Co. and Advocate on Record, Supreme Court, told The Economic Times: "No, under the 7th Central Pay Commission, the new system has evolved where crossing the 50% DA threshold does not automatically increase other allowances. In present, the revision of these components is not attached directly to DA but is subject to a separate decision by the Government of India.

Gehrana added: "In simple words, without an official notification or policy from the Government of India, there will be no modification to the allowances like HRA, even if DA touches the 53% mark."