Good News For Govt Employees, Pensioners As Centre Likely To Hike Dearness Allowance By 3%

In what is seen as an addition to the celebratory mood prevailing in public on account of Ganesh Chaturthi, there are speculations that the government can likely increase the dearness allowance (DA) by 3% anytime soon. The news has brought joy to several central government employees and pensioners, who had been waiting for this hike eagerly.

Noticeably, rising prices have put an additional burden on the common man's pockets recently. The central government increases the dearness allowance periodically to combat inflation. Usually, the DA is revised in the months of January and July. However, this time the announcement concerning the DA hike comes a bit later as we have already crossed half of September.

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.

If the Union Government gives a nod to a 3% DA hike this time, the DA figure for central government employees will increase from 42% to 45%.

As per media reports citing government sources, the announcement of the DA hike may come as early as the end of this month or around the festive time of Navratri. The second DA hike of 2023, once announced, will become effective from July 1, 2023 onwards.

How much your salary will increase if DA is hiked by 3%?

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 3% from July 2023, his DA will be hiked to Rs 18,000. Thus, his in-hand salary will be increased by Rs 18,000-Rs 16,800 = Rs 1,200.