Central government employees received an exciting announcement today about a hike in their Dearness Allowance (DA) as a Diwali Bonus. The Cabinet meeting approved a 3 per cent increase in their DA. Last year too, the government had announced an upward revision coinciding with the festive season, keeping in tradition with announcing DA and dearness relief, in early March and October.
With the 3 per cent hike in Dearness Allowance (DA) increase, an entry-level central government employee, who receives a starting monthly salary of around Rs 18,000, can expect a raise of about Rs 540 per month, starting from July 1, 2024.
What is Dearness Allowance (DA)?
Dearness Allowance (DA) is a component of the salary package. It is a certain percentage of a government employee's basic salary designed to cushion the effect of inflation on their living expenses. For example, if your monthly basic salary is Rs. 50,000 and you are eligible for a 50 per cent Dearness Allowance (DA) based on your basic pay, you would receive Rs. 25,000 as DA each month. This allowance is usually revised every six months to account for changes in the cost of living index.
All India Consumer Price Index (AICPI), which monitors retail price fluctuations determines the DA revision which is also updated twice annually. The Central Government had in May 2024 approved a four per cent hike in dearness allowance (DA) and dearness relief for government employees, from 46 per cent to 50 per cent. The fallout was a complementary revision in various other allowances, including a revision of the gratuity component, for over a crore central government employees.
So, from the current 50 per cent DA component, as the government approved a 3 per cent hike, the revised rate would be 53 per cent with a retrospective effect from July 1, 2024. They will receive arrears for July, August, and September. Three days ago, the Himachal Pradesh government announced a 4 per cent DA hike just before Dussehra, benefitting over 1.8 lakh employees and 1.7 lakh pensioners in the state.
