Central government employees get early Diwali gift with 3% DA hike

Dearness Allowance hike: The additional 3% increase is expected to ease the financial burden on government employees amid rising inflation.

In Short

• Union Cabinet hikes DA by 3% for central government employees
• DA increases to 53% of basic pay amid rising inflation
• DA hike boosts employee income just ahead of Diwali celebrations

The Union Cabinet on Wednesday cleared a 3% hike in the Dearness Allowance (DA) for central government employees. This increase brings the total DA to 53% of basic pay, offering crucial financial relief just ahead of the Diwali festivities. The additional 3% hike is expected to ease the financial burden on government employees amid rising inflation.

"Union Cabinet has approved a 3% hike in DA for central government employees and Dearness Relief for pensioners. A total of Rs 9,448 crore annually will be added to the paycheck of central government employees," Union Minister Ashwini Vaishnaw told news agency ANI.

For example, if the basic salary is Rs 40,000, the 3% hike in Dearness Allowance (DA) would result in an additional Rs 1,200 per month. This would bring the total DA to Rs 21,200 per month, up from Rs 20,000. This increment will significantly enhance their disposable income as they prepare for the upcoming festive season.

With this, central government employees will receive their October salary with the revised DA, along with arrears for the past three months.

Pensioners will also benefit from this announcement, as the Dearness Relief (DR) will be adjusted accordingly.

The DA hike is determined based on the All India Consumer Price Index (AICPI), reflecting the government's ongoing commitment to support employees facing increasing living costs.

WHAT IS DA?

Dearness Allowance is a cost-of-living adjustment paid to government employees, pensioners, and public sector employees. Its primary purpose is to help cushion the impact of inflation by adjusting salaries and pensions in line with rising prices. The DA is revised twice a year, based on the inflation rate as measured by the AICPI, ensuring that the purchasing power of employees and pensioners is maintained despite fluctuating market conditions.

The DA hike comes after a previous 4% increase in March 2024, which brought the DA to 50%.

These adjustments are typically reviewed biannually, in January and July, with announcements often made in March and September. The government uses the AICPI as a key indicator to decide the DA rates, aiming to cushion its employees from inflationary pressures. This year's October approval aligns with the pattern of pre-Diwali announcements in recent years, ensuring that employees receive some financial reprieve during the festive season.

As the festive season approaches, this DA hike is expected to boost consumer spending and bring much-deserved cheer to central government employees and pensioners. Not only does the hike benefit those currently employed, but it also aids pensioners through an increase in Dearness Relief, ensuring that they, too, receive necessary support to tackle rising living costs.

While discussions regarding the 8th Pay Commission continue, the government's focus remains on addressing inflation through strategic measures like the DA increase. Today's approval marks a significant step towards supporting government employees during challenging economic times, making the upcoming Diwali celebrations even more special.