This Diwali the Indian government plans to end up presenting a piece of good news to more than one crore central government employees and pension holders. The Union Cabinet, led by Prime Minister Narendra Modi, is expected to clear a proposal for an increase in dearness allowance by 3%. This increment will take the DA from 50% to 53% of basic pay which will help employees with some additional cash especially before festive season.
Effective Date and Arrears
The new DA hike will be implemented with retrospective effect from the first of July one thousand nine hundred and twenty-four. This means that while the allowance is now regarger than ith will elver increase with the amount for each of the empoyees and pensioners for the months of July August and September in form of arrears. This means that this will receive a considerable increase and will be a very good financial boost to many, who will receive a lump sum payment before the expensive holiday season.
It was also advantageous to the employees of the two organizations financially.
That means based on a basic pay of Rs. 18,000 per month, the 3% DA means an additional of Rs. 540 per month in the hand of the government employee. The number may seem small to work with on the face of it, but it becomes more important in relation to higher salaries or compounded over several months of arrears.
Understanding DA Adjustments
Dearness allowance is also revised on a half-year basis by the government and whose main purpose is to cater for inflation. This adjustment is calculated from the All India Consumer Price Index [AICPI for short], that measures the incremental change in the cost of established goods and services. Because inflationary challenges have remained a constant threat to family expenses, this adjustment is likely to be welcomed by many.
Other advantages for pensioners
Pensioners will also share the happiness of DA increase in their pension as the DR is equivalent to the adjustment made to DA for employees. The increment is believed to put money into the coffers of retired persons especially those who solely dependant on their pensions.
Before the financial burden increases during Diwali, this DA hike helps in reducing the burden to an extent for many households or adds to the festive season joy for many.
