42% Dearness Allowance fron January 1, 2023. A hike of 4%

According to a press statement from the Labour Bureau, the All-India CPI-IW for December 2022 dropped by 0.2 points to 132.3 (one thirty two point three) points. With this release, DA/DR for January 2023 has now been confirmed with a 4% increase. It will be at 42% in the 7th CPC DA/DR. 

Dearness Allowance (DA) for central government employees in India is revised every six months, based on changes in the Consumer Price Index (CPI) for Industrial Workers.

The Consumer Price Index (CPI) for Industrial Workers is a measure of inflation for urban industrial workers in India. It reflects the changes in the prices of a basket of goods and services consumed by this specific population, and is used as a benchmark to adjust various financial benefits, such as Dearness Allowance, pensions, and wages. The calculation of the CPI-IW takes into account the spending patterns of industrial workers, including their consumption of food, housing, fuel, light, clothing, and medical care, among other items. The index is compiled and published by the Labor Bureau of India, Ministry of Labor and Employment. The frequency of its release and the specific items included in the basket may change over time.

In general, when the CPI-IW increases, it indicates that the cost of living has gone up, and as a result, the rate of DA is increased to compensate for the loss of purchasing power of employees and pensioners. The government revises the rate of DA every six months, based on the changes in the CPI-IW. The calculation of the DA and its relationship with the CPI-IW is defined by the seventh pay commission.