Central government staffers and pensioners are in for a relief as the dearness allowance or DA and dearness relief (DR) is likely to be hiked and the announcement on the front is expected in July. DA is provided to central govt. staffers while DR is given to pensioners.
DA announcement is made twice a year. This year it was first announced in January. If reports are to go by, the centre may consider in the soaring inflation which for May month came at 7.4%, way higher than the RBI's targeted levels.
Forthcoming DA hike
As per reports, the hike in DA this time can be by another 5%. Further as the All India Consumer Price Index (AICPI) climbed to 127.7 points in April, the May and June data shall be tracked closely as that will have a role to play in the DA hike decision. Report by Times Now mentions that in case the figure for these months continue to be more than 127, then DA shall be hiked by another 5%.
As per norms, the DA announcement used to be earlier made in March and September. Nevertheless because of Covid 19 led disruption, there was a break of around 1.5 years, post which DA hike resumed in July 2021. As per the 7th Pay Commission's recommendations, DA for all Central government employees and DR for pensioners were hiked in July 2021 to 28 percent from 17 percent.
Later, the hike was effected in October 2021 at the rate of 3% effective from July 1, 2021. Thus all central government employees began to get DA with a hike of 31% from July 1.
Subsequently another DA hike of 3% was announced on January 1, 2022 and government employees since then have been receiving DA at 34 per cent.