The Dearness Allowance (DA) for all central government employees has been hiked by 3%, bringing it to 53% of the basic pay, compared to 50% earlier
The Dearness Allowance (DA) for all central government employees has been hiked by 3%, bringing it to 53% of the basic pay, compared to 50% earlier. This comes just ahead of Diwali celebrations after a significant delay in its announcement.
In Short
- Union Cabinet hikes DA by 3% for central government employees
- DA increases to 53% of basic pay amid rising inflation
- DA hike boosts employee income just ahead of Diwali celebrations
The centre hiked the dearness allowance (DA) for all central government employees by 3%
Dearness allowance refers to the adjustment of the pay to keep up with inflation and rising living costs, calculated on the basis of the All India Consumer Price Index (AICPI).
The central government hikes the DA two times a year in January and July, with announcements made around Holi in March and around Diwali in September, with the arrears of the hike paid off henceforth.
For this year specifically, the DA hike for July got significantly delayed, with the announcement originally being expected before the Haryana elections held on October 5.
Because of this, the Confederation of Central Government Employees and Workers wrote to Finance Minister Nirmala Sitharaman, drawing attention to it.
Similar to DA, the dearness relief (DR) will also be hiked accordingly. DR is the same pay adjustment, but for pensioners.
As it comes just around the festive season, the DA hike may also provide a boost to consumer spending.
WHAT IS DA?
Dearness Allowance is a cost-of-living adjustment paid to government employees, pensioners, and public sector employees. Its primary purpose is to help cushion the impact of inflation by adjusting salaries and pensions in line with rising prices. The DA is revised twice a year, based on the inflation rate as measured by the AICPI, ensuring that the purchasing power of employees and pensioners is maintained despite fluctuating market conditions.
The DA hike comes after a previous 4% increase in March 2024, which brought the DA to 50%.
These adjustments are typically reviewed biannually, in January and July, with announcements often made in March and September. The government uses the AICPI as a key indicator to decide the DA rates, aiming to cushion its employees from inflationary pressures. This year’s October approval aligns with the pattern of pre-Diwali announcements in recent years, ensuring that employees receive some financial reprieve during the festive season.
As the festive season approaches, this DA hike is expected to boost consumer spending and bring much-deserved cheer to central government employees and pensioners. Not only does the hike benefit those currently employed, but it also aids pensioners through an increase in Dearness Relief, ensuring that they, too, receive necessary support to tackle rising living costs.
While discussions regarding the 8th Pay Commission continue, the government’s focus remains on addressing inflation through strategic measures like the DA increase. Today’s approval marks a significant step towards supporting government employees during challenging economic times, making the upcoming Diwali celebrations even more special.
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