Civil servant and the pensioner could have reasons to cheer soon. Prime Minister Narendra Modi’s government is likely to announce an approximate hike of 50 per cent in September 2024 in the Dearness Allowance (DA) and Dearness Relief (DR). This is what you should know about this much anticipated change.
Anticipated DA Increase
This has been accompanied by the workers’ heightened expectation for a DA increase in the current financial year’s third quarter. As reported recently, it is expected that the announcement of this increase will be made early next month, in the first week of September, to be precise.
The DA was last adjusted by 4 percent in March 2024 for implementation from January the following year to raise the DA to 50 percent of the basic pay. Some people thought that the government might decide to combine DA with the basic pay and then restart it at 0%. However, the latest signals indicate that no such merger is imminent at the moment.
Historical Background of DA Mergers
Of course, the integration of DA with the basic salary has been an issue of debate in the past. Former the 5th Pay Commission carried proposal to merge DA with the basic wage/salary whenever the DA index crosses fifty percent of the base index. For example, in February 2004, DA was added to and became part of the basic salary; and then the DA factor was pegged at 0%. The 6th Pay Commission opposed such mergers even if the DA crosses 50 percent of basic pay.
Expected DA/DR Increase for September 2024
Gazetters believe that the government might provide for a 3% DA for employees and DR for pensioners. This shall be relative to the All India Consumer Price Index [AICPI] which measures the current trends in the retail price applying several sectors as the base. The DA is computed on the basis of the average AICPI of the last twelve months in respect of central government employees and the last three months in relation to the employees in the public sector.
