New Delhi: The central government has decided to hike the dearness allowance (DA) of its employees by 4% from the existing 46% to 50%, effective from January 1, 2024. This was announced by Union Minister Piyush Goyal on Thursday after a cabinet meeting chaired by Prime Minister Narendra Modi.
The DA is a cost of living adjustment allowance that is paid to government employees and pensioners to offset the impact of inflation. It is calculated as a percentage of the basic salary and varies according to the location of the employee. The DA is revised twice a year, in January and July, based on the average of the All-India Consumer Price Index (AICPI) for the previous 12 months.
The increase in DA will benefit about 48.67 lakh central government employees and 67.95 lakh pensioners, who will receive an additional amount of Rs. 2,592 crore per month as DA². The annual burden on the exchequer due to the DA hike will be Rs. 31,104 crore.
The DA hike is expected to boost the morale and purchasing power of government employees and pensioners.
The DA hike is in line with the recommendations of the 7th Central Pay Commission, which suggested a formula for the calculation and revision of the DA.
