The employees of the Central government may receive increased dearness allowance soon. It is reported that the Centre is deliberating hiking the DA by four percentage points, from 38 per cent to 42 per cent.
The move is expected to benefit over one crore employees and pensioners.
The DA was last revised in September 2022, with effect from 1 July, 2022. In that round of revision, the DA was hiked by four percentage points, to 38 per cent on the basis of the percentage increase in 12-month average of All India Consumer Price Index for the period ending June, 2022.
Employees’ and pensioners’ DA is calculated on the basis of the latest Consumer Price Index for Industrial Workers (CPI-IW) revealed by the Labour Bureau, under the Labour Ministry, every month.
Taking into account the inflation, the Ministry of Labour Ministry increases the DA. While the DA increment calculation comes to 4.23 per cent, the Government does not increase the DA beyond the decimal point. Therefore, the same will be hiked by 4 percentage points only.
A proposal will be submitted to the Cabinet for approval. The proposal will outline the financial impact of the same to the Cabinet.
The DA is provided to employees and pensioners with an aim to compensate them for rising prices. The cost of living goes up over a period of time is reflected through CPI-IW. The periodic revision of DA takes place twice in a year.
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