Centre may announce 3% DA hike ahead of Diwali, 1 crore employees, pensioners to benefit

DA adjustment is based on the All India Consumer Price Index

The Union Cabinet, led by Prime Minister Narendra Modi, is expected to approve a 3 percent hike in the dearness allowance (DA) ahead of Diwali, a move that will benefit more than one crore central government employees and pensioners.

The increase will take the allowance from 50 percent to 53 percent of the basic pay, bringing offering much-needed financial relief ahead of the festival.

The DA hike will be effective from July 1, 2024, meaning employees will also receive arrears for the months of July, August and September, sources said.

For an entry-level government employee with a basic salary of Rs 18,000 a month, the hike would translate into an additional Rs 540 in the take-home pay.

The Confederation of Central Government Employees and Workers recently requested finance minister Nirmala Sitharaman to address the delay in the announcement of the DA/DR hike.

The government typically revises DA twice a year — in January and July — but the July hike has been delayed this year.

While DA benefits current employees, dearness relief is provided to pensioners, offering protection from inflationary pressures.

The DA adjustment is based on the All India Consumer Price Index (AICPI), which tracks retail price fluctuations and helps align employees’ pay with rising living costs. With inflation continuing to impact households, the hike will help ease some of the financial strain.