Central Government Might Increase Dearness Allowance By 3% To 45%

If the hike happens, the DA for employees and pensioners will increase to 45 per cent from the current 42 per cent. 

The increased DA will come into effect from July 1, 2023.

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The central government is expected to raise the dearness allowance (DA) by about three per cent for it’s employees. If the hike happens, the DA for employees and pensioners will increase to 45 per cent from the current 42 per cent. 

The DA for more than one crore employees and pensioners is decided according to the latest Consumer Price Index for Industrial Workers (CPI-IW) released by the Labour Bureau on a monthly basis, reported PTI. Labour Ministry oversees the labour bureau. The latest CPI-IW for the month of June, 2023 was released on July 31, 2023. 

Commenting on the hike, All India Railwaymen Federation General Secretary Shiva Gopal Mishra told PTI, “We are demanding a four percentage point hike in dearness allowance. But the dearness allowance hike works out to be a little over three percentage points. The government does not factor in hiking DA beyond the decimal point. Thus DA is likely to be increased by three percentage points to 45 per cent.”

Mishra also noted that the expenditure department from the Finance Ministry is expected to make a proposal to increase the DA and it’s revenue impact. The department will then present the proposal for approval to the Union Cabinet. 

The increased DA will come into effect from July 1, 2023. At the moment, the central government employees and pensioners are entitled to a 42 per cent dearness allows, the report said. 

The last change in the DA was made on March 24, 2023 and came into effect on January 1, 2023. The change saw an increase in the DA by four percentage points to 42 per cent, on the baiss of the percentage increase in the 12-month average of the All India Consumer Price Index for the period ending December, 2022. 

Dearness allowance is a way to compensate the employees and pensioners for the increasing prices. The CPI-IW represents the increase in the cost of living over a period of time and the allowance is revised on a biannual basis.