The Centre may announce an increase in the dearness allowance (DA) and dearness relief (DR) for central government employees and pensioners post its Cabinet meeting on Wednesday.
A likely decision will be tracked by over one crore beneficiaries, who are looking for a reprieve amid rising costs and ahead of the Diwali season.
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The Confederation of Central Government Employees and Workers recently addressed a letter to Finance Minister Nirmala Sitharaman, expressing concerns over the delay in the DA/DR hike announcement. The dearness allowance, intended to offset inflation impacts, is typically reviewed twice a year—in January and July—though official announcements often come later. Currently, the DA stands at 50%, with the upcoming adjustment expected to raise it to 53%, effective from July 1, 2024.
Employees are anticipating the announcement, which could deliver a 3% increase in their DA. The change would come into effect in October, alongside arrears for the previous three months, covering July to September.
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This aligns with last year’s pattern, where the hike was announced in early October.
“The DA hike will happen in the next Cabinet meeting. We are expecting an increase of at least 3%,” a senior official from the Confederation of Central Government Employees & Workers was quoted as saying in a media report.
The DA calculation is closely linked to the All India Consumer Price Index (AICPI), which tracks retail price movements over the past 12 months. Any increase in DA is mirrored in a rise in DR, providing financial support to retired employees as well. With global inflationary pressures and rising costs, the decision carries significance for managing household budgets across the country.
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This increase follows the 4% adjustment made in March 2024, which raised the DA from 46% to 50%. This milestone also triggered revisions in other allowances, including house rent allowance, in line with the 7th Pay Commission’s guidelines. The 7th Pay Commission, established nearly a decade ago, had proposed automatic revisions in basic pay once DA crosses 50%. However, this proposal was not approved, leading unions to plan raising the demand again with the upcoming 8th Pay Commission.
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