The Union Cabinet, led by Prime Minister Narendra Modi, approved a 3% increase in dearness allowance (DA) and dearness relief (DR) for Central government employees and pensioners on Wednesday. This hike raises the DA and DR from 50% to 53%, effective from July 1. The decision provides significant relief to Central government employees ahead of the Diwali festivities.
Impact on Employees and Pensioners
The biannual revision of DA and DR affects approximately one crore Central government employees and pensioners. This increase aims to offset the impact of inflation. DA is calculated based on the average Consumer Price Index for Industrial Workers (CPI-IW), published monthly by the Labour Bureau, making it vital for determining government salaries and pensions.
Recent Adjustments and Future Outlook
In March, the government had raised the DA by 4%, effective from January 2024, bringing the total to 50% of basic pay. The Seventh Pay Commission report stipulates that various allowances, including house rent allowance, automatically revise once DA exceeds 50% of basic pay. However, the basic pay itself has not increased, as this recommendation was absent from the final report.
In a related announcement, Chhattisgarh Chief Minister Vishnu Dev Sai declared a 4% DA increase for state government employees, effective October 1. This adjustment raises their DA to 50% of the basic salary, also in time for Diwali.
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