Recently, the central government announced dearness allowance (DA) rate revisions for certain segments of government employees. Now, as many media reports suggests, it might be planning to increase it for the central employees by four per cent.
Usually, the central government increases dearness allowance biannually, specifically in January and July. The most recent hike in DA occurred in March 2023, but its implementation was retroactive from January 1, 2023. Moreover the raise increased the DA from 38 per cent to 42 per cent.
Now as many media reports have indicated, the Central government is expected to raise the dearness allowance by four per cent in either September or October. As a result, the DA percentage would increase to 46 per cent. This latest adjustment will benefit approximately 47.58 lakh Central government employees along with 69.76 lakh pensioners.
Recently, the governments of Madhya Pradesh and Odisha recently raised the dearness allowance for their employees by 4 per cent each. Prior to that, Karnataka had also increased the DA by 4 per cent with retrospective effect from January 1, 2023.
Dearness Allowance (DA) is an additional payment made by the government to employees, both in the public and private sectors, as a means of compensating for the rising cost of living. In other words, it is essentially an inflation-linked adjustment in the salary or wages of employees to counterbalance the impact of inflation on the purchasing power of employees’ salaries.
DA is usually calculated as a percentage of the basic salary or wage, and it is periodically revised to account for changes in the cost of living.