HomeInvestingFinanceCabinet clears 4% hike in Dearness Allowance for Government employees

Cabinet clears 4% hike in Dearness Allowance for Government employees

The federal government has raised the dearness allowance for its more than one crore workers and pensioners by 4%, bringing the total from 38% to 42%. Union Minister Anurag Thakur said that the government would spend Rs 12,815 crore to pay the increase in dearness allowance, or DA.

To compensate for increasing costs, the government provides DA to workers and eldercare assistance to seniors. It is computed using the most recent consumer price index for industrial workers, or CPI-IW.

According to the administration, the DA increase will go into effect on January 1, 2023, even though it was supposed to start on January 1, 2024.

“… This will benefit about 47.58 lakh central government employees and 69.76 lakh pensioners. This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission,” the government said in a statement.

The centre last updated DA in September 2022, with retroactive effect from July 1, 2022. It was hiked by 4% to 38% at that time as well.

DA is updated at least twice a year.

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