DA Hike The central government has finally given a festive gift to the government employees on Wednesday. It has been decided to increase the Dearness Allowance (DA) by 3% with effect from July 1, 2024. After a 4% hike in March, dearness allowance was 50% of basic pay. After a 3% hike on 16th October 2024, Dearness Allowance now stands at 53% of basic pay. This decision will benefit more than one crore central government employees and pensioners.
Importance of inflation allowance
Dearness Allowance (DA) is an important part of the pay package of Central Government employees. It is designed to protect employees from the impact of inflation. Based on the Consumer Price Index (CPI), Dearness Allowance adjusts employees’ wages to the increased cost of living, so that their purchasing power is not affected by economic fluctuations.
Effect of 3% dearness allowance increase
To understand the implications of the recent 3% Dearness Allowance (DA) hike, let’s look at a hypothetical example: If a central government employee’s current basic pay is Rs. 46,200, then their previous 50% DA is Rs. was 23,100. After adjustment as per 53% DA, his new allowance will be Rs. will increase to 24,486.
हे पण वाचा:
पीएम किसान योजनेच्या याद्या जाहीर! निवडणुकीपूर्वी शेतकऱ्यांच्या खात्यात पैसे जमा PM Kisan Yojana
This means that from October they will have to pay an additional Rs. 1,386 (Rs. 24,486 – Rs. 23,100) will get DA. Moreover, since the DA research is being implemented with retrospective effect from July 1, 2024, they will also get arrears for the previous three months – July, August and September.
Inflationary Pension Increase for Central Government Pensioners
The dearness pension (DR) for Central Government pensioners has also been increased by 3% to 53% of the total. Due to this adjustment these pensioners will get more pension every month from October 2024 onwards.
To illustrate the impact of this increase, consider the following scenario: A Central Government pensioner is currently paid per month Rs. 50,400 as basic pension, they will get Rs. 25,200 was getting dearness pension. Now with inflation pension at 53%, his monthly inflation pension will be Rs. 26,712, which will increase their monthly pension to Rs. 1,512 will increase.
Increase in State Dearness Allowance
Several states have recently announced hikes in Dearness Allowance (DA) for their government employees. Chhattisgarh Chief Minister Vishnu Dev Sai on October 17 increased dearness allowance for state government employees by 4%, bringing the total dearness allowance to 50%.
Similarly, the Government of Odisha has approved a 4% increase in Dearness Allowance for employees of State Public Sector Undertakings (PSUs), increasing Dearness Allowance from 46% to 50%, with effect from January 1, 2024.
In Himachal Pradesh, Chief Minister Sukhwinder Singh Sukhu has announced a 4% hike in dearness allowance for state government employees and pensioners with effect from January 1, 2023. He also announced immediate settlement of outstanding medical bills of government employees and pension arrears of persons above 75 years of age. Class-IV employees will also be entitled to arrears of their enhanced dearness allowance of Rs. 20,000 installments will be received immediately.
The Sikkim government has announced a 4% increase in dearness allowance for its employees ahead of the Durga Puja festival. With effect from 1 January 2024, dearness allowance for state government employees was increased from 46% to 50%. This adjustment will also apply to the inflationary pension paid to the pensioners.
Similarly, the Jharkhand state government has approved a 9% hike in dearness allowance for government employees. Earlier, employees were getting 230% Dearness Allowance as per 6th Central Pay Commission. After the recent hike, the new dearness allowance has been revised up to 239%.
Central Dearness Allowance vs State Dearness Allowance
When a new Pay Commission is set up (generally every 10 years), the Central Government merges the Dearness Allowance (DA) with the basic pay of the employees, revalues it to 0 and then increases the Dearness Allowance twice a year in January and July. The 7th Central Pay Commission recommendations came into effect from 1st January 2016.
Some states are still working according to the 6th Pay Commission guidelines and determining the dearness allowance hike based on their own calculations. For example, Jharkhand government employees recently got a 9% dearness allowance hike, making their dearness allowance 239% of their basic pay.
States that have adopted the 7th Pay Commission generally align with the central government in announcing dearness allowance hikes, though they often lag behind the central government’s schedule. For example in Chhattisgarh, dearness allowance (DA) for state government employees was increased by 4%.
