Centre Approves 3% Dearness Allowance Government Employees
Union government has approved 3% Dearness Allowance (DA) for the central government employees. The revised Dearness Allowance, which is a cost of living adjustment aimed at cushioning the impact of inflation on salaries that ensures employees’ purchasing power remains intact despite rising prices of essential goods and services, will be effective from July 1, 2024, ensuring that employees and pensioners receive the enhanced allowance in time for the festive season.
DA is revised twice a year, in January and July, based on changes in the Consumer Price Index for Industrial Workers (CPI-IW), which tracks inflation. It applies not only to current employees but also to pensioners, ensuring that their income retains value over time.
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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.
The DA hike has come after a previous 4% increase in March 2024 which had bought the DA to 50%.
Dearness Allowance is the cost of living adjustments paid to government employees, pensioners and public sector employees. The primary purpose of the allowance is to help cushion the impact of inflation by adjusting salaries and pensions in line with rising prices. Based on the inflation rate as measured by the ACPI, the DA is revised twice a year. This will ensure that the purchasing power of employees and pensioners is maintained dispute fluctuating market conditions.
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These announcements are usually made biannually, in January and July with announcements often made in March and September. The DA rates are decided by using AICPI. This year’s October approval aligns with the pattern of pre-Diwali announcements in recent years, ensuring that employees receive some financial benefits during the festive season.
