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DA Hike: Employees and Pensioners Rejoice as 4% Increase Announced, with Further Updates Expected

DA Hike: Employees and Pensioners Rejoice as 4% Increase Announced, with Further Updates Expected

Positive Developments for Central Government Employees: Anticipated 4% DA Increase in March

Encouraging news is on the horizon for central government employees, as indications point towards an imminent increase in Dearness Allowance (DA). According to various online reports, the government is in the process of finalizing a 4% DA hike scheduled for March. If implemented, this adjustment will propel the Dearness Allowance and Dearness Relief (DR) of employees beyond the 50% mark.

The adjustment is grounded in the Consumer Price Index (CPI) data, following the central government protocol for industrial workers. Presently, the 12-month average data stands at 392.83, indicating that the DA will likely be approximately 50.26% of the basic pay.

This forthcoming DA hike aligns with the approved formula, as per the recommendations of the 7th Central Pay Commission. Notably, in October 2023, the cabinet approved a 4% increase in DA for government employees and DR for pensioners. This raised the DA from 42% to 46%, and now, another 4% increase is on the horizon, set to be implemented from January 1, 2024. The anticipated adjustment also means that employees and pensioners may receive four months’ worth of arrears.

In the previous decision made in 2023, approximately 48.67 lakh central government employees and 67.95 lakh pensioners benefited. The government also granted Diwali bonuses to Group C and non-gazetted Group B level officers, including paramilitary forces. The Finance Ministry established a threshold of ₹7,000 for the calculation of non-productive bonuses (ad hoc bonuses) for central government employees.

The government’s decision on DA hikes is contingent on the inflation rate, with increases likely during periods of high inflation. The adjustments in DA and DR are determined based on the 12-month average increase in the All India Consumer Price Index (AICPI) for the financial year. While the central government typically revises allowances on January 1 and July 1 each year, the official announcement is usually made in March and September. The upcoming DA hike is poised to benefit both employees and pensioners alike.

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