DA is given to serving government staff while DR is paid to pensioners.
New Delhi: In the latest development related to the 7th Pay Commission, it is being reported that the Centre is likely to announce the second hike in the Dearness Allowance (DA) and Dearness Relief (DR) for employees and pensioners in the first week of September. In terms of numbers, the hike is expected to be 3% in DA and DR this time, reports Financial Express.
DA is given to serving government staff while DR is paid to pensioners.
The Dearness Allowance and Dearness Relief are raised twice a year and the government makes announcements in March and September, respectively. The hike, however, gets implemented retrospectively from January and July every year.
Earlier in January this year, the DA was raised by 4% to take the level to 50% of the basic. As a result of DA touching the 50% of basic level, other allowances also saw hikes up to 25%.
There is likely to be a 3% hike in the DA for July-December period of 2024 while overall it is anticipated that there will be at least 3% hike in dearness allowance for government employees and dearness relief (DR) for pensioners.
The government pays DA to serving employees in respective government departments and DR to pensioners. The DA hike is calculated on the basis of All India Consumer Price Index (AICPI), which tracks the change in retail prices across various sectors.
The DA hike was earlier calculated based on the consumer price index with the base year 2001. However, it was replaced with a new consumer price index with the base year 2016 to calculate the DA from September 2020.
On August 2, it was reported that the Central government will increase the DA by 3% in September effective from July 1, 2024.