The Union government is set to raise the dearness allowance (DA) by four per cent for Central government employees in March, 2024, bringing it to 50 per cent. This increase also applies to dearness relief (DR) for pensioners. The adjustment in DA and DR is determined based on the All-India Consumer Price Index for industrial workers (CPI-IW) and occurs twice a year, in January and July.
In the previous hike in October 2023, DA rose by four per cent to reach 46 per cent. Given the current inflation trend, a similar four per cent increase is anticipated in the upcoming adjustment.
More than one crore Central government employees and pensioners stand to gain from these adjustments in DA and DR. Official figures indicate that there are 47.58 lakh Central government employees and 69.76 lakh pensioners.
The increase in DA and DR will apply to Central government employees and pensioners from 1 January, 2024. Consequently, if the Centre announces the DA now, employees and pensioners will receive arrears for the preceding months.
If a government employee earns a monthly basic salary of Rs 30,000 and the DA rate is 46 per cent, they receive Rs 13,800 as dearness allowance. If the DA rate increases to 50 per cent, the total dearness allowance becomes Rs 15,000. Therefore, a four per cent increase in the DA rate results in a salary increase of Rs 1,200 for the employee.