The dearness allowance of more than 1 crore government employees is reportedly going to be increased by the Centre.
According to the agreed-upon formula for the purpose, the central government is likely to raise the dearness allowance for its more than 1 crore employees and pensioners by four percentage points, to 42% from the current 38%.
Central Government Hikes Dearness Allowance for 1 Crore Employees
The latest Consumer Price Index for Industrial Workers, released each month by the Labour Bureau, a division of the Ministry of Labour and Employment, serves as the basis for calculating the DA for employees and pensioners.
As per Shiva Gopal Mishra, Secretary of All India Railwaymen Federation General, “the CPI-IW for Dec. 2022 was released on Jan. 31, 2023. The dearness allowance hike works out to be 4.23%. But the government does not factor in hiking DA beyond decimal point. Thus. DA is likely to be increased by four percentage points to 42%.”
He explained that the Ministry of Finance’s expenditure division will draft a proposal to increase DA along with the revenue implications and submit it for approval to the Union Cabinet. The increase in DA will take effect on January 1, 2023.
38% DA Being Paid To More Than 1 Crore Government Employees
As of now, 38% DA is paid to more than 1 crore central government employees and pensioners. The most recent change to the DA was made on September 28, 2022, and it became effective on July 1, 2022.
Based on the percentage increase in the 12-monthly average of the All India Consumer Price Index for the period ending June 2022, the Centre increased DA by four percentage points to 38%. Employees and pensioners receive the DA as a price-inflation benefit. Over time, the cost of living rises and is reflected in the CPI-IW. Twice a year, the allowance is adjusted periodically.
In August last year, we reported a positive development for the Maharashtra state government employees, wherein, the dearness allowance payable to them has been hiked by 3% by the Eknath Shinde government.
