Union Government Approves Four Percent Hike In Dearness Allowance For Central Government Employees

As India is waiting for the 2024 Lok Sabha election schedule announcement, the Union Cabinet today (March 7) approved a four per cent hike in Dearness Allowance for central government employees and Dearness Relief to pensioners. The hike was approved in the cabinet meeting chaired by Prime Minister Narendra Modi.

The increase in the allowances will be applicable from January 1, 2024. Union Commerce and Industry Minister Piyush Goyal while briefing the media said that the government’s decision will benefit 49.18 lakh employees and 67.95 lakh pensioners. The hike was as per the recommendations of the Seventh Central Pay Commission. According to the minister, the total financial impact of the hike would be Rs 12,857 crore annually to the exchequer.

Mr Piyush Goyal further said, “With the hike of 4 percent, since the increase has now gone up to 50 percent, the consequential increase in HRA will be from 9 to 10 percent, from 18 to 20 percent, and from 27 to 30 percent. Similarly, gratuity upper ceiling will increase to 25 lakhs, and all the other benefits that were being received will all go up by 25 percent,” noting the House Rent Allowance (HRA) and other benefits with the four percent hike.

The government had in October 2023 made another hike, increasing the Dearness Allowance and Dearness Relief by four per cent. The hike had come into effect from July 1, 2023. The general election date will probably be announced before the end of this month.