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NEW DELHI — The Central government is likely to announce a 4 per cent increase in dearness allowance (DA) for its employees this month to compensate them for inflation.
At present, the DA for Central government staff and dearness relief (DR) for pensioners is fixed at 46 per cent, which is likely to go up to 50 per cent.
According to the recommendations of the 7th Pay Commission, once the DA reaches 50 per cent, there will also be an increase in the house rent allowance, children’s education allowance, transport allowance etc. due to the Central government staff, which will further raise their take-home pay packet.
When implemented, the increase in DA and DR will be effective from January 1, 2024, as a result of which the government staff and pensioners will also get arrears for the previous months.
The dearness allowance for Central government employees is calculated based on the latest Consumer Price Index for Industrial Workers (CPI-IW). The Labour Bureau, a wing of the Ministry of Labour, publishes the CPI-IW data every month.
The Union government usually revises the dearness allowance twice a year, in January and July. The Centre had announced the previous DA hike on October 18, 2023, which came into effect from July 1, 2023. Similarly, before this, the DA hike that kicked in from January 2023 was announced on March 24, 2023.