In a latest development, the Centre is expected to make the much awaited announcement regarding the second hike in Dearness Allowance (DA) and Dearness Relief (DR) for employees and pensioners from July 2024 in September.
DA Hike Expected In September
They are anticipating that the Prime Minister Narendra Modi led government might sanction a 3% increase in DA and DR during this phase.
Here mentioned, DA or Dearness Allowance is assigned to serving government staff.
Similarly DR or Dearness Relief is allocated to pensioners.
Moving ahead, the total dearness allowance (DA) is set to rise to 53% with the anticipated 3% increase scheduled for September.
In addition to this it is unlikely that the government will disburse the 18-month arrears for DA and dearness relief (DR) that were paused amid the COVID-19 pandemic.
Prior to this, the last DA hike was announced on March 7, 2024 which was effective from January 1, 2024.
Then it was raised to 50%, basically this DA led to a rise in various allowances, including the House Rent Allowance (HRA), over the past few months.
Usually, the center announces the DA/DR increments biannually, with the updates shared in March and September.
Further these increases are applied from January and July each year, retroactively.
If you are wondering regarding the calculation of the DA hike, it is determined based on the All India Consumer Price Index (AICPI), which monitors changes in retail prices across different sectors.
Earlier, the DA increment was calculated using the consumer price index with the base year 2001.
But, the government decided to transition to a new consumer price index with the base year 2016 for computing the DA starting from September 2020.
How To Calculate DA?
If you are planning to do the DA calculation, its formula with the new base year is given below.
For Central Government Employees
DA% = [(Average of AICPI (Base Year 2001 = 100) for the last 12 months – 115.76)/115.76] x 100
For Public Sector Employees
DA% = [(Average of AICPI (Base Year 2001 = 100) for the last 3 months – 126.33)/126.33] x 100
Please note here that from December 2023 to June 2024, the CPI-IW has risen by 2.6 points, increasing from 138.8 to 141.4.
Considering the same, the percentage of DA hike is expected to rise from 50.28% to 53.36% from July 2024.