Central government employees are eagerly anticipating a crucial update ahead of Diwali: a potential hike in the Dearness Allowance (DA).
The DA, at present, stands at 50% of basic pay, following a 4% increase announced in March 2024. According to reports, the government may raise DA by another 3-4%, continuing the trend of biannual reviews, typically announced in January and July.
The DA is a vital part of the compensation structure for over one crore central government employees and pensioners.
It helps them cope with inflation by adjusting their pay in accordance with the Consumer Price Index. For example, an employee with a basic salary of ₹18,000, currently receiving ₹9,000 as DA, could see their monthly allowance increase by ₹540 if a 3% hike is implemented.
A 4% increase would raise the DA to ₹9,720, reflecting the government’s efforts to ease the burden of rising living costs.
This announcement comes at a time when employees are particularly sensitive to inflationary pressures. The DA hike formula, which takes into account the 12-month average of the All India Consumer Price Index (AICPI), ensures that the government’s approach to salary revisions is closely tied to economic realities. Though no official confirmation has been made regarding the percentage increase, the anticipation is palpable as employees and pensioners look forward to the potential financial relief.
Historically, the government reviews the DA in January and July but announces adjustments in March and September, aligning this year’s potential October declaration with prior trends. Alongside DA, Dearness Relief (DR) for pensioners is also expected to rise, further extending support to retirees who rely on the government’s timely interventions.
As employees await the DA hike announcement, discussions about the 8th Pay Commission continue to swirl. However, according to the Minister of State for Finance, no plans to implement this commission are under consideration at present. Despite growing demands, the government’s focus remains on immediate inflation control through mechanisms like DA hikes.