7th Pay Commission: Employees Provident Fund Organisation (EPFO) announced an increase in interest rates on Saturday, bringing the rate to 8.25 percent, as a significant gift to PF account holders. Following the PF interest rate hike during the election year, an increase in Dearness Allowance (DA Hike) is now anticipated shortly. If sources are to be trusted, the administration might decide significantly on this in March 2024. In the event that this occurs, central staff will receive a 50% DA.
EPFO Announces New Interest Rate
The new interest rate for the Employees Provident Fund (EPF) account for the 2023–2024 fiscal year has been announced by the EPFO Central Board of Trustees (CBT). Approximately 7 crore employees nationwide received gifts from EPFO, which has since upped it to 8.25 percent. PTI claims that interest payments to holders of PF accounts will increase by 0.10 percent going forward.
The Employees Provident Fund (EPF) declared an interest rate of 8.15 percent for accounts for 2022–2023 on March 28 of last year. The expectation of a DA raise has grown among central employees in tandem with the increase in the PF interest rate.
Anticipation of DA Hike in March 2024
The dearness allowance (DA) hike for the January–June half year is anticipated to be announced in March 2024. The government raises employee DA twice a year. If rumours are to be trusted, the administration may present the central employees with a 4 percent DA hike this time around prior to the elections, and it may be declared the following month.
Let us clarify that while the administration has not yet made an official statement in this regard, this anticipation is being stated based on a number of stories. However, there will be a massive boost in employees’ salaries if the DA is increased by 4%. DA for central staff is currently 46%, with the possibility to reach 50%.
Anticipated 4% DA Increase
On the one hand, a 4 percent increase in central employees’ dearness allowance is anticipated; should this occur, the benefit will be paid to the employees on January 1, 2024. Additionally, there may be an increase in the employees’ house rent allowance once the dearness allowance exceeds 50%.
When the DA surpassed 25 percent in July 2021, there was a three percent increase in HRA, bringing it to 27 percent. Under such circumstances, an increase in HRA is anticipated when DA reaches fifty percent; if rumours are to be believed, this can reach thirty percent.
Biannual DA Revision
Twice a year, the government updates the dearness allowance provided to central employees. which they begin to receive benefits from on January 1st and July 1st. In terms of computation, Dearness Allowance, or DA, is a significant component of employee pay and a rise in it directly affects the employees’ take-home pay.
The rate of inflation is used to calculate it. It is anticipated that employee DA will increase in direct proportion to inflation. The CPI-IW for all of India fell by 0.3 points to 138.8 in December 2023. It is expected that the government may raise DA by 4% based on this.
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