Dearness allowance hike in October? All eyes on special Union Cabinet meeting

The previous DA hike of 4% was announced in March 2024

The Union Cabinet is expected to take a decision on the hike in dearness allowance (DA) and dearness relief (DR) for government employees during a special meeting on Thursday, reported News18 Hindi.

Government employees have been eagerly awaiting a hike in DA, which is usually expected towards the end of September.

Earlier, Confederation of Central Government Employees and Workers wrote a letter to finance minister Nirmala Sitharaman expressing concerns over a delay in the announcement.

Usually, Centre announces DA revision twice a year in January and July. The official announcements are made later. The salaries and pensions of the goverment employees come with arrears of the three months (July-September) in October.

In the letter to Sitharaman, S B Yadav said that there is discontent among employees and pensioners due to the delay in the announcement of DA/DR.

According to News18 Hindi, the government is expected to increase the dearness allowance by 3%.

If the government goes ahead with the increase, DA will go up from 50% to 53%. While serving employees get DA, pensioners are eligible for DR.

The previous DA hike of 4% was announced in March 2024, which came into effect from January 2024.

There is also speculation that the government could merge DA with the basic salary and start afresh from 0% DA, the report said. However, the government has denied any such plan.

The announcement of DA hike is decided on the basis of the Consumer Price Index (AICPI), which measures changes in retail prices across different sectors.

What is dearness allowance?

Dearness Allowance (DA) is a percentage of a government employee's basic salary designed to offset the impact of inflation on their cost of living.

The allowance helps ensure that employees can maintain their purchasing power in the face of rising prices.

DA is typically adjusted every six months, based on fluctuations in the cost of living index, which reflects changes in the prices of essential goods and services.