New Delhi: In a festive season windfall, the central government has announced a 3% hike in dearness allowance (DA) and dearness relief (DR), benefiting over one crore government employees and pensioners. This decision, approved by the Union Cabinet on Wednesday, brings much-needed financial relief ahead of Diwali and Durga Puja celebrations. Information and Broadcasting Minister Ashwini Vaishnaw is expected to officially announce the decision later today.
The DA will now rise from 50% to 53% of the basic pay, offering a significant pay boost. For an entry-level central government employee with a basic salary of ₹18,000 per month, the hike translates to an increase of ₹540, effective from July 1, 2024. This change follows a similar 4% DA increase earlier this year in March, which brought the allowance to 50%.
Delay Sparks Employee Concerns
The announcement comes after weeks of anticipation. On September 30, the Confederation of Central Government Employees and Workers sent a formal letter to Finance Minister Nirmala Sitharaman, voicing discontent over the delay in the DA/DR announcement. The confederation’s general secretary, S. B. Yadav, urged for prompt action, noting that the festive season was fast approaching and that employees were also awaiting the declaration of performance-linked bonuses (PLB) and ad hoc bonuses.
How DA and DR Hikes are Calculated
Dearness allowance (for employees) and dearness relief (for pensioners) are revised twice a year, in January and July, to offset the impact of inflation. These revisions are based on the All-India Consumer Price Index (AICPI). The formula for calculating the percentage hike takes into account the average AICPI for the past 12 months, ensuring that government salaries and pensions keep pace with rising living costs.
The formula for central employees is as follows:
DA Percentage = ((Average of AICPI (Base Year 2001=100) for the past 12 months – 115.76) / 115.76) x 100.
For public sector employees, the formula is adjusted slightly, using a different base index value.
This festive DA/DR boost, combined with anticipated bonuses, will provide significant financial support to employees and pensioners, ensuring they can celebrate the season with a little more cheer.
