The government is expected to increase the dearness allowance (DA) by 3 percent points to 45 percent, as per the reports.
New Delhi: The Central government is likely to give a hike of 3 per cent in Dearness Allowance (DA) and Dearness Relief (DR) rates to Central Government Employees and pensioners soon. Reports suggest that the decision on the DA/DR rate hike is likely to be announced next month i.e. September 2023. To recall, in July, the retail inflation in the country hit a 15-month-high level. The government is expected to increase the dearness allowance (DA) by 3 percent points to 45 percent, as per the reports. The DA hike will be effective from July 1, 2023.
“The CPI-IW for June 2023 was released on July 31, 2023. We are demanding a four percentage point hike in dearness allowance. But the dearness allowance hike works out to be a little over three percentage points. The government does not factor in hiking DA beyond the decimal point. Thus DA is likely to be increased by three percentage points to 45 per cent,” reported PTI quoting All India Railwaymen Federation General Secretary Shiva Gopal Mishra as saying recently.
Why Government Announce DA/DR Hike?
The Central Government provides DA/DR as a relief measure to cut down the impact of inflation on the value of the in-hand salary/pension provided to Government employees and pensioners. The DA/DR hike is announced as per the formula recommended by the 7th Pay Commission.
It may be noted that the dearness allowance is calculated on the basis of the latest Consumer Price Index for Industrial Workers (CPI-IW) brought out by the Labour Bureau every month.
How Many Employees Will Get The Benefit?
Currently, there are over 1 crore Central Government Employees and pensioners who will benefit from the next round of DA/DR hikes. To recall, in March 2023, the DA/DR rate was increased by 4% from 38% to 42%. The next hike, when announced, may take this rate to 45%.
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