Soon, employees employed under the central government will be rewarded with a massive hike in their DA. The DA hike on account of the newly implemented 7th Pay Commission could be released on October 23 2024 which should ideally come as festive season before Diwali. This will be of course be a material increase in cash flow for employees and also accompanied by 3 months back pay.
What Is Dearness Allowance?
Dearness Allowance is an allowance paid to the organised group ‘D’ employees of the Central and State Governments, employees of Public Sector Undertakings and pensioners.
Even when there is inflation, it assists them to maintain their purchasing power since the value of money is adjusted. The allowance is computed using the All India Consumer Price Index for Industrial Workers (AICPI-IW for short.
Expected Increase in DA
The DA is forecasted to grow by 3 percent, thereby taking the overall to 53%. This calculation will also use the AICPI-IW index data from from January to June, year 2024.
The index numbers show an increase, for the June index was 141.4 points and placed the DA at 53.36 percent. The government is expected to round this up, it will mean that employees will be getting a deree from the current 50% to 53%.
Implementation and Arrears
However, the announcement will happen in October, but the increase will be effect from July 1, 2024. Employees will be paid amounts equal to the previously received salary for the months of July, August and September together with their increased wages in employees October. This is the normal practice under the 7th Pay Commission the DA hike is computed on a half-yearly basis.
