This adjustment is projected to result in a salary boost for central government employees. | Photo: Shutterstock
The central government is expected to announce a 3-4 per cent increase in Dearness Allowance (DA) for central government employees ahead of Diwali. While official confirmation is anticipated in October, details remain unconfirmed. Last year, the DA increase was announced during the first week of October.
This adjustment is projected to result in a salary boost for central government employees. For those on an entry-level salary of Rs 18,000, the increase would mean an additional Rs 540-720 per month, according to a DNA report. Employees earning a monthly salary of Rs 30,000, with a basic pay of Rs 18,000, currently receive a DA of Rs 9,000, which constitutes 50 per cent of their basic salary. A 3 per cent rise would increase this to Rs 9,540, while a 4 per cent rise would take it to Rs 9,720 per month.
DA and DR hikes explained
Dearness Allowance (DA) is provided to government employees, while pensioners receive Dearness Relief (DR). Both allowances are revised twice yearly, in January and July. Over 10 million central government employees and pensioners currently benefit from a DA set at 50 per cent.
Earlier this year, in March 2024, the government implemented a 4 per cent increase in both DA and DR, raising them to 50 per cent of basic salary. The adjustments are calculated based on the All India Consumer Price Index (AICPI), with the percentage change in DA and DR determined by the index’s 12-month average. Although these revisions come into effect on January 1 and July 1 annually, announcements are typically made in March and September.
The formula to calculate DA was revised in 2006 and now factors in the AICPI for central government employees and pensioners. For public sector employees, DA is calculated based on the average AICPI over the past three months.
As the official announcement approaches, the potential increase is expected to provide a welcome financial boost to government employees.
First Published: Sep 30 2024 | 12:55 PM IST
