The government has approved dearness allowance (DA) by 3% for central government employees and pensioners, just ahead of Diwali. Previously set at 42%, the DA will now rise to 45%, effective from July 1, 2024. The hike in DA and DR (Dearness Relief) is expected to offer financial relief to approximately 1.15 crore central government employees and pensioners.
The most recent DA revision, a 4% increase, was announced in March and became effective from January 2024. DA is essential to the compensation framework for over 10 million central government employees and pensioners, acting as a protection against inflation. The DA ensures that employees' earnings align with rising living costs by linking salary adjustments to the Consumer Price Index (CPI), providing a financial buffer during periods of inflation.
The Centre reviews DA twice annually, with changes taking effect in January and July, and announcements typically made in March and September, coinciding with the January hike disclosed around Holi and the July increase around Diwali in October or November. DA or DR hikes are usually implemented retroactively from January 1 and July 1 of the current year. The central government generally announces the July DA increase ahead of the festive season.
Private sector employees have voiced concerns about being overlooked, as this DA hike benefit is limited to government employees.
Meanwhile, Chhattisgarh Chief Minister Vishnu Deo Sai also declared a 4% increase in DA for state government employees, bringing it to 50% of their basic salary. This new rate, effective from October 1, will benefit about 3.9 lakh employees. The Chief Minister's Office (CMO) announced this on social media platform X, calling it a Diwali gift to state employees.
Earlier this year, Chhattisgarh had raised the DA to 46% in March. Himachal Pradesh followed a similar path, approving a 4% hike for its state employees and pensioners, benefiting around 180,000 employees and 170,000 pensioners just before Diwali.
In March 2024, the Union Cabinet gave its approval for the release of an additional instalment of DA for central government employees and DR for pensioners, effective from January 1, 2024. The Centre announced that the total financial burden of these increases would amount to ₹12,868.72 crore annually, benefiting around 49.18 lakh central government employees and 67.95 lakh pensioners.
