The Union Cabinet on Wednesday approved a 3% increase in the Dearness Allowance (DA) for central government employees. This brings the total DA to 53% of their basic pay, providing some financial relief just before Diwali. The increase aims to help employees manage rising living costs.
For instance, if someone’s basic salary is Rs 40,000, the 3% hike means an additional Rs 1,200 per month, increasing their total DA from Rs 20,000 to Rs 21,200. This will boost their income ahead of the festive season. Employees will receive their October salary with the revised DA, including three months of arrears. Pensioners will also see an increase in their Dearness Relief (DR).
The DA hike is based on the All India Consumer Price Index (AICPI), showing the government's effort to help workers cope with inflation.
WHAT IS DA?
Dearness Allowance (DA) is a cost-of-living adjustment given to government employees, pensioners, and public sector workers. Its main goal is to help offset the impact of inflation by adjusting salaries and pensions according to rising prices. DA is revised twice a year, based on the inflation rate measured by the All India Consumer Price Index (AICPI), ensuring that employees and pensioners maintain their purchasing power.
This recent DA hike follows a 4% increase in March 2024, which had raised DA to 50%. The adjustments are usually reviewed in January and July, with announcements made in March and September. The government relies on the AICPI to decide on DA rates, helping employees cope with inflation. The latest DA hike, approved in October, follows a pattern of pre-Diwali announcements, providing financial relief during the festive season.
As Diwali nears, the DA increase is expected to boost spending and bring some cheer to central government employees and pensioners. The hike benefits both current employees and pensioners, as they also receive increased Dearness Relief to help with rising living costs.
While talks about the 8th Pay Commission are ongoing, the government remains focused on addressing inflation through actions like this DA hike, offering much-needed support during tough economic times.
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