The Indian government has approved a 3% hike in Dearness Allowance (DA) for central government employees, ahead of the Diwali festival . This move is expected to benefit around 47 lakh central government employees and 68 lakh pensioners. The DA hike will be effective from July 1, 2024.
Dearness Allowance is a percentage of the basic salary paid to employees to offset the impact of inflation on their cost of living .
It is adjusted periodically, usually every six months, to account for changes in the cost of living index. The government typically announces DA hikes twice a year, in January and July.
To put this hike into perspective, if an employee’s monthly salary is ₹30,000 and their basic pay is ₹18,000, they currently receive a DA of ₹9,000, which is 50% of their basic pay. With the 3% hike, their new DA would be ₹9,540 . This increase will help central government employees cope with rising living costs.
Historically, the government has made DA hike announcements around Diwali and Holi. The Centre usually increases DA and dearness relief for employees and pensioners twice yearly, in January and July, with announcements typically made in early March and October .
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