The Central Government is set to discuss an increase in the dearness allowance (DA) and dearness relief (DR) for central government employees and pensioners in its upcoming Cabinet meeting on Wednesday. This announcement is eagerly awaited by over one crore beneficiaries who seek financial relief amid rising expenses, especially with the Diwali season approaching.
Recently, the Confederation of Central Government Employees and Workers reached out to Finance Minister Nirmala Sitharaman, expressing their concerns regarding the delay in announcing the DA/DR hike. The DA is designed to help mitigate the effects of inflation and is usually evaluated twice a year—in January and July. However, official announcements often come later. Currently, the DA is set at 50%, with expectations for an adjustment that could raise it to 53%, effective from July 1, 2024.
Employees are hopeful for an announcement that may include a 3% increase in their DA, which would take effect in October. This increase would also include arrears for the previous three months, covering July to September. This pattern aligns with last year’s timeline, where the hike was announced in early October.
"The DA hike will happen in the next Cabinet meeting. We are expecting an increase of at least 3%," a senior official from the Confederation of Central Government Employees and Workers said.
The calculation of DA is closely tied to the All India Consumer Price Index (AICPI), which monitors retail price movements over the past year. Any increase in DA also results in a rise in DR, providing essential financial support to retired employees. Given the current global inflationary pressures and increasing costs, this decision is crucial for managing household budgets nationwide.
This anticipated increase follows a 4% adjustment made in March 2024, which raised the DA from 46% to 50%. This previous hike also prompted revisions in other allowances, including house rent allowance, in accordance with the 7th Pay Commission's guidelines. Although the 7th Pay Commission suggested automatic revisions in basic pay once the DA surpasses 50%, this proposal was not approved. Consequently, unions are preparing to renew their demands with the upcoming 8th Pay Commission.
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