That’s the good news for all the central government employees and pensioners! The government is likely to give a new raise to dearness allowance very soon which can lead to up to 20% hike in salary. That means millions of government employees and retirees in the country stand to benefit from this decision. Government reviewed salaries and DA in 7th Pay under the commission twice in a year, once in January and second time in July.
What is the concept of Dearness Allowance (DA)?
Dearness allowance by definition is a form of a cost of living adjustment pin that is extended to employees of the government to cushion them from the effects of inflation. It is arrived at from the All India Consumer Price Index (AICPI) published monthly by the Labour Bureau. Presently, Central Employees enjoy 50% DA, and raise in it is likely 3-4%, making it to 53-54%.
An aspect that will be greatly affected by the proposed DA hike is salaries. For instance:
- Basic Salary: ₹18,000
- Current DA (50%): ₹9,000
- New DA (53%): ₹9,540
- Salary Increase: ₹540 per month
- Basic Salary: ₹56,900
- Current DA (50%): ₹28,450
- New DA (53%): ₹30,157
- Salary Increase: ₹1,707 per month
Who Will Benefit from the DA Hike?
The DA hike will benefit:
- Central government employees
- Pensioners
- Employees of central autonomous bodies
- Employees of central public sector undertakings (PSUs)
Additional Benefits Beyond DA
The DA hike may also trigger increases in other allowances such as:
- House Rent Allowance (HRA)
- Travel Allowance (TA)
- Bonuses
- Gratuity payouts
Economic Impact of the DA Hike
While the DA hike will increase employees’ purchasing power, it will also put an additional financial burden on the government, estimated at around ₹12,000-15,000 crores annually. However, it is expected to boost demand in the economy, helping to stimulate growth while keeping inflation in check.
- DA is revised twice a year, in January and July.
- It is based on the All India Consumer Price Index (AICPI).
- Pensioners also benefit from the hike, as it adjusts their Dearness Relief (DR).
- The increase impacts various allowances and bonuses, making it a significant financial boost for government employees.
