The central government is poised to boost the dearness allowance (DA) for its vast workforce of over one crore employees and pensioners by three percentage points, raising it from the current 42% to 45%.
Read on to find out all the details about this new development!
Central Government To Increase DA
This increase comes as per the agreed formula, wherein the DA for employees and pensioners is calculated based on the latest Consumer Price Index for Industrial Workers (CPI-IW), which is published monthly by the Labour Bureau, a wing of the Labour Ministry.
Addressing the matter, Shiva Gopal Mishra, the General Secretary of the All India Railwaymen Federation, highlighted that the CPI-IW for June 2023 was released on July 31, 2023. He and his federation are advocating for a four percentage point hike in the dearness allowance.
However, due to the government’s practice of not considering decimal points while calculating the DA, the hike is expected to be slightly over three percentage points, leading to the projected 45% increase.
The Finance Ministry’s expenditure department will be responsible for formulating a proposal detailing the hike in DA and its financial implications, which will then be presented to the Union Cabinet for approval. The anticipated implementation date for the DA hike is July 1, 2023.
How Will Increased DA Help Government Employees?
At present, the over one crore central government employees and pensioners are receiving a DA of 42%. The most recent revision in DA occurred on March 24, 2023, with effect from January 1, 2023, when it was increased by four percentage points based on the percentage rise in the 12 monthly average of the All India Consumer Price Index for the period ending December 2022.
The purpose of providing DA to employees and pensioners is to offset the impact of rising prices, as the cost of living tends to increase over time, as reflected in the CPI-IW. This allowance is subject to periodic revision, taking place twice a year to ensure that it remains commensurate with the changing economic conditions.
The anticipated hike in DA will be a significant relief to the central government’s workforce and pensioners, helping them cope with the inflationary pressures and maintain their purchasing power. It is a critical measure taken by the government to ensure the well-being and financial stability of its employees and retirees in the face of an ever-changing economic landscape.
