Dearness Allowance Hiked by 3% for Central Govt Employees

The Union Cabinet has delivered an early Diwali gift to Central Government employees by approving a 3% increase in Dearness Allowance (DA). 

This decision comes just in time for the festive season, providing crucial financial relief to millions of government employees across the country.

What Is Dearness Allowance (DA)?

Dearness Allowance is a cost-of-living adjustment paid to government employees, pensioners, and public sector employees.

Its primary purpose is to help cushion the impact of inflation. The aim is to do so by adjusting salaries and pensions in line with rising prices.

The DA is revised twice a year, based on the inflation rate as measured by the All India Consumer Price Index (AICPI). 

This ensures that the purchasing power of employees and pensioners is maintained despite fluctuating market conditions.

Key Details of the Hike

The 3% DA hike is effective from July 1, 2024. With this increase, the total DA now stands at 53% of the basic pay.

For example, if an employee’s basic salary is Rs 40,000, the 3% hike in DA would result in an additional Rs 1,200 per month.

This brings the total DA to Rs 21,200 per month, up from Rs 20,000.

Central government employees will receive their October salary with the revised DA, along with arrears for the past three months.

The adjustment of Dearness Relief (DR) will also benefit pensioners in accordance with this announcement.

The additional 3% hike is a timely move due to rising inflation and the financial challenges.

By enhancing disposable income just ahead of Diwali, the government aims to ease the burden on employees.

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