The increase in Dearness Allowance provides significant relief to central government employees during the festive season. The central government has announced a 3 percent increase in the dearness allowance (DA) and dearness relief (DR) for more than one crore employees and pensioners, aimed at offsetting the impact of rising prices. This adjustment raises the total DA from 50 percent to 53 percent, which will be disbursed in addition to the basic salary. The decision regarding the DA increase was made during a cabinet meeting led by Prime Minister Narendra Modi earlier today. The new rate will take effect from July 1, 2024. This decision, made just weeks before Diwali, provides significant relief to central government employees during the festive period.
The government stated that “this increase is in line with the established formula, which is based on the recommendations of the 7th Central Pay Commission.”
The increase in Dearness Allowance (DA) and Dearness Relief (DR) will impose an additional financial burden of Rs 9,448.35 crore annually on the exchequer, benefiting approximately 49.18 lakh central government employees and 64.89 lakh pensioners, according to government sources.
DA is provided to government employees, while DR is allocated to pensioners as a means to offset the impact of rising prices. This allowance is adjusted biannually and is determined based on the most recent consumer price index for industrial workers.