Central government employees and pensioners may soon have reason to celebrate, as reports suggest a forthcoming increase in Dearness Allowance (DA) and Dearness Relief (DR). According to various media sources, the Centre is anticipated to announce a second hike in DA and DR for its employees and pensioners in September 2024. Once this hike is implemented, it will be retroactively effective from July 2024.
Speculations are rife that the Central government is considering a 3% increase in DA for its employees and pensioners. Currently, the DA stands at 50%, and with the proposed hike, this figure is expected to rise to 53% starting from July 2024. This increase will be a significant boost for thousands of government employees and pensioners whose incomes are calculated based on the 7th Pay Commission's recommendations.
Despite the potential DA hike, it is unlikely that the Centre will release the 18-month DA and DR arrears that were withheld during the COVID-19 pandemic. There have been no official statements or indications from the government regarding the release of these arrears, which remains a point of contention among employees and pensioners.
Once the latest DA hike is formally announced, it will benefit thousands of central government employees and pensioners across the country. The last DA increase, which took effect on January 1, 2024, was officially announced on March 7, 2024, raising the DA to 50%. This adjustment also positively impacted other allowances, such as the House Rent Allowance (HRA).
The Centre typically announces DA/DR hikes twice a year—first in March and then in September, with changes applied retroactively from January and July. These regular adjustments are crucial in helping government employees and pensioners cope with the rising cost of living and inflation.
Dearness Allowance is a cost of living adjustment allowance that the Central government provides to its employees and pensioners. It is designed to offset the impact of inflation and ensure that the purchasing power of employees is not eroded by rising prices. The DA is a crucial component of the salary structure for government employees, providing them with financial stability amidst fluctuating market conditions.
In a recent update, the DA for central government employees was increased by 4%, bringing it to a total of 50% from the previous rate of 46%. This increase took effect on January 1, 2024. Similarly, the Dearness Relief (DR) for central government pensioners also rose by 4% to reach 50%.
DA% = [(Average of AICPI (Base Year 2001 = 100) for the last 12 months – 115.76) / 115.76] x 100
DA% = [(Average of AICPI (Base Year 2001 = 100) for the last 3 months – 126.33) / 126.33] x 100
The anticipated DA hike in September 2024 is a positive development for central government employees and pensioners, offering them financial relief amidst ongoing economic challenges. However, the unresolved issue of the 18-month DA arrears continues to be a source of concern. As the Centre prepares to make the official announcement, employees and pensioners eagerly await the benefits that this increase will bring to their monthly earnings.