The Union Cabinet is expected to grant approval for a 4% hike in Dearness Allowance (DA) for government employees during its meeting scheduled for Wednesday, according to insider sources.
Should the government opt for the 4% increase, it would elevate the current DA rate from 42% to 46%. This increment is set to be effective from July 1, 2023, resulting in augmented salaries from the month of November, along with the disbursement of arrears spanning from July to October. The proposed adjustment is poised to benefit approximately 47 lakh employees and 68 lakh pensioners.
Dearness Allowance (DA) is a compensation component designed to offset the impact of the cost of living, provided to public sector employees by the government. Dearness Relief (DR), which serves a similar purpose, is extended to central government pensioners. The calculation of the Dearness Allowance is predicated on the Consumer Price Index for Industrial Workers, a metric released monthly by the Labour Bureau.
To counteract the effects of inflation, the government reviews and revises the DA/DR rate every six months.
For employees with a minimum basic salary of Rs 18,000, the current 42% DA contributes an additional monthly income of Rs 7,560. With a 4% increase to 46% in DA, this translates into a monthly augmentation of Rs 8,280. Those with this basic salary can anticipate an annual salary increment of Rs 8,640.
Concurrently, individuals with a maximum basic salary of Rs 56,900 currently experience the benefits of a 42% DA, which adds Rs 23,898 to their monthly earnings. Following the DA increase of 46%, this monthly augmentation is projected to rise to Rs 26,174.
Â
