Under Prime Minister Narendra Modi, the central government may soon give a new benefit to millions of central employees. Reports suggest that the government plans to increase the dearness allowance (DA) before the festival season, which will result in higher monthly payments for employees.
Announcement Expected Soon
According to an ET report, the central government may soon announce an increase in the DA and dearness relief (DR). While DA benefits current central government employees, DR benefits retired employees or pensioners.
Changes Made Twice a Year
The dearness allowance is adjusted twice a year based on the recommendations of the Seventh Pay Commission. The first adjustment is made in January, and the second in July. Since July has already passed and August is ending, it is expected that the government will soon decide on the next DA increase.
Recent Increase in March
Earlier this year, the DA was increased in March 2024. At that time, the government announced a 4% increase in both DA and DR. This increase raised the DA and DR rates above 50%. The increase from March was applied starting January.
Expected Increase
This time, it is expected that the government may increase DA and DR by 3% each. If this happens, the DA rate could exceed 53%. Last year’s average Consumer Price Index for Industrial Workers (CPI-IW) was 400.90, which suggests that the DA rate could be approximately 53.35%. The government adjusts DA and DR rates based on the CPI-IW.
