CHENNAI: MK Stalin, the Chief Minister of Tamil Nadu on Wednesday, May 17, announced a Dearness Allowance (DA) hike of 4 percent for government employees with retrospective effect, effective from April 1.
16 lakh government employees, teachers, and pensioners will gain benefits from the announcement. The increase will result in an increased expense to the exchequer of Rs 2,366.82 crore.
According to an official statement, the state was in debt as a result of the Covid-related decline in income collections and the financial problem in the state that was handed down from the previous regime, but the Stalin-led DMK administration was nevertheless carrying out commitments made to teachers and government employees.
In a statement, the government said that the DA rise would be comparable to the Center's.
Dearness allowance is an additional component of the salary provided to government employees to offset the impact of inflation on their cost of living. It is a percentage of the basic salary and is revised periodically based on the prevailing economic conditions and inflation rates.
The calculation and revision of dearness allowance for government employees vary from country to country. In many countries, including India, the dearness allowance is determined by the respective government based on the recommendations of a designated pay commission or committee.
The pay commission or committee studies various factors such as the cost of living, consumer price index, and inflation rate to determine the appropriate percentage increase in the dearness allowance. This revised percentage is then applied to the basic salary of government employees to arrive at the new dearness allowance.
