DA Hike Alert: Govt Approves 4% Hike In Dearness Allowance For Central Govt Employees

DA Hike News: In a big relief to thousands of central government employees, the Union Cabinet on Wednesday approved the much-awaited 4% hike in Dearness Allowance. The DA hike has come as a festive bonanza for government employees at a time when people are in a festive mood. Earlier, Goodreturns had reported that the government will announce a hike in DA during Navratri this year.

Noticeably, with this 4% hike, the DA for government employees will be increased from 42% to 46%.

Union Minister Anurag Thakur today said that the release of the additional installment of dearness allowance will be applicable from July 1, 2023.

The DA hike decision will benefit 48.67 lakh central government employees and 67.95 lakh pensioners.

This increase aligns with the accepted formula, based on the recommendations of the 7th Central Pay Commission.

The combined impact on the exchequer from both Dearness Allowance and Dearness Relief (DR) would be Rs.12,857 crore per year. It is worth mentioning that the government has already approved Diwali bonuses for Group C and non-gazetted Group B level officials, which includes paramilitary forces.

It is worth mentioning that the dearness allowance for central government employees is calculated on the basis of the latest Consumer Price Index for Industrial Workers (CPI-IW). There is a set formula to calculate the dearness allowance of central government employees and pensioners.

How much your salary will increase if DA is hiked by 4%?

For example, suppose a central government gets a basic salary of Rs 40,000 per month. At 42%, his DA was at Rs 16,800. If DA jumps by 4% from July 2023, his DA will be hiked to Rs 18,400. Thus, his in-hand salary will be increased by Rs 18,400-Rs 16,800 = Rs 1,600.