The central government is expected to increase the dearness allowance (DA) for its employees by at least 3 per cent before Diwali. According to media reports, the Union Cabinet is expected to make the announcement close to Diwali celebrations on October 31, 2024.  

  

Why Is Dearness Allowance Distributed?  

Dearness Allowance (DA) is a part of a government employee’s remuneration and is intended to mitigate the impact of inflation on their household budget. It is calculated based on the All India Consumer Pricing Index (AICPI), which monitors the changes in the prices of retail items.  

A raise in DA not only increases the take-home pay, but also impacts their other allowances.   
  
The Confederation of Central Government Employees and Workers recently requested the Union Finance Minister, Nirmala Sitharaman, to expedite the announcement.  

  

Why Is Volatility A Good Thing For Your Investment?

Hike Expectations  

The current DA is at 50 per cent of the basic pay. The new hike could take the DA to as much as 53 per cent, effective July 1, 2024. Some one crore central government employees and pensioners will be eligible. The expected timeline for the announcement is based on last year’s hike shortly before the holiday season kicked off. Although no official comments have come on the hike, media reports citing industry sources believe it is imminent.  

  

The Himachal Pradesh government announced a 4 per cent DA hike for 1.80 lakh employees and 1.70 lakh pensioners before Dussehra. The government also promised early salary and pension disbursals for the festivities. Pensioners above 75 years will also receive their pending arrears.  

The last DA hike in March 2024 increased the dearness allowance from 46 to 50 per cent. With the 7th Pay Commission guidelines linking automatic pay revisions to DA crossing 50 per cent, employees and their unions are now considering the 8th Pay Commission as the next battlefront.  Ayushman Bharat Scheme Vs Private Insurance: Know Their Key Differences