Centre Approves 3% DA Hike Ahead Of Diwali | What Does That Mean

In a crucial monetary relief with just a few days left for the Diwali festivities, the Union Cabinet on Wednesday cleared a 3 percent hike in the Dearness Allowance (DA) for all central government employees bringing the total DA to 53% of basic pay.

Following this increment, the central government employees are expected to receive their October salary with the revised scale of DA alongside the arrears for the past three months. As per reports, the benefit of the DA hike will also reach the pensioners as the Dearness Relief (DR) will be adjusted accordingly.

What is DA?

In economic terms, Dearness Allowance (DA) is defined as a cost-of-living adjustment primarily paid to government employees, public sector employees, and pensioners. DA hike is a method to adjust salaries and pensions in accordance with rising prices. The main reason behind the intrumentalisation of the allowance is to help people deal with the impact of inflation.

Usually DA is revised twice a year based on the inflation rate measured by the All India Consumer Price Index (AICPI) in a bid to maintain the purchasing power of employees and pensioners despite market fluctuations.

How DA hike is determined?

The central government determines DA hike based on the All India Consumer Price Index (AICPI).

In simple terms, if someone's basic salary is 50,000 rupees, the latest 3 percent hike in DA would result in an additional rupees 1,500 per month.

This increment is expected to significantly enhance people's disposable income right ahead of the festive season.

How is it going to help?

The this DA hike right ahead of Diwali is widely expected leave more money in hand of the central government employees and pensioners. The pensioners are expected to be benefited through an increase in Dearness Relief (DR).

Amid discussions on the 8th Pay Commission, the Centre continues to address a pressing issue like inflation through strategic measures such as the DA increase.

However, this latest approval is being seen as a significant step towards supporting government employees.

DA hiked by state govt: List of states

Chhattisgarh

Right ahead of the festival of lights, Chhattisgarh government declared a 4 percent increase in the dearness allowance (DA) for employees of the state government, raising the total DA to 50 percent.

Speaking to reporters, CM Vishnu Deo Sai said, "Our government has decided that all state employees are currently getting 46 per cent DA, we are increasing their DA by 4 per cent. From now on, they will get 50 per cent DA." .

Odisha

The Odisha government too has approved a 4 pecent rise in dearness allowance (DA) for workers of State Public Sector Undertakings (PSUs) who are receiving salaries based on the Revised Scale of Pay, 2017.

Himachal Pradesh

In 2022, the Himachal Pradesh government revealed a 4 percent increase in dearness allowance for state government employees and pensioners, starting from January 1, 2023.

Sikkim

Starting from January 1, 2024, Sikkim's government has increased dearness allowance as well for its employees from 46 percent to 50 percent. The enhancement also applied to dearness relief for pensioners.

Jharkhand

The Jharkhand government in 2023 agreed to a 9 percent increase in the dearness allowance (DA) for government employees, starting from January 1, 2024.