The Centre has approved a 4% increase in DA for central government employees

The 4% rise in Dearness Allowance and Relief is a significant step that will help central government employees and retirees manage rising living expenses

By raising the Dearness Allowance (DA) and Dearness Relief (DR) by 4%, the Union Government recently made a significant move to help Central government employees and retirees. The new price will take effect on July 1st, 2023.

Increase in Dearness Relief and Allowance

Dearness Allowance and Dearness Relief will increase by 4%, according to Union Minister Anurag Thakur.

The DA will increase to 46% from 42%.

Many people will gain from this choice, including 67.95 lakh retirees and 48.67 lakh central government employees.

Calculating the Dearness Allowance

The Consumer Price Index for Industrial Workers (CPI-IW), which is released monthly by the Labour Bureau, serves as the basis for the calculation of the dearness allowance for employees and pensioners.

Beginning on July 1, 2023, the release of the additional DA and DR payment will be applicable.

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Cabinet endorsement

In accordance with the recommendations of the 7th Central Pay Commission, the Union Cabinet, presided over by Prime Minister Narendra Modi, approved the disbursement of this additional tranche of DA and DR.

This 4% rise is intended to make up for inflation and price increases.

Financial Consequences

It is expected that Dearness Allowance and Dearness Relief together have an annual financial impact on the government of Rs. 12,857 crore.

Around 48.67 lakh Central Government employees and 67.95 lakh pensioners will directly benefit from this hike.

Bonuses for Diwali and one-time bonuses

For Group C and non-gazetted Group B level officials, including paramilitary forces, Diwali incentives were also granted by the government.

For the fiscal year 2022–2023, the finance ministry established a cap of 7,000 yen on non–productivity linked bonuses (ad hoc bonuses) for central government personnel.

Bonus for Employees Not Linked to Productivity

For the fiscal year 2022–2023, the Department of Expenditure, a division of the Finance Ministry, awarded an ad hoc bonus that was not productivity-linked and was equal to 30 days’ worth of pay.

This bonus is available to all non-gazetted employees in Groups B and C of the central government who are not covered by any productivity-linked incentive programs.