The central government usually announces revisions in dearness allowance (DA) for its employees and dearness relief (DR) rates for pensioners twice a year – January and July. The next DA/DR hike announcement is expected by March 2023.
Historically, DA changes come into effect from January 1 and July 1, while being declared in March and October. If the past trend continues, central staff can expect a 4% DA/DR raise in March, which would apply retrospectively from January 1, 2024.
Source: CPI-IW data published by Labour Bureau
*The linking factor for the conversion of base year 2016=100 to base year 2010=100 is 2.88.
Over 1 Crore Staff and Pensioners to Gain
The DA and DR rates currently stand at 46%. A 4% hike would raise them to 50% – the highest level in recent times. This directly boosts monthly payouts for more than one crore central employees and pensioners dependent on DA and DR to offset inflationary pressures.
For instance, an employee with basic pay of Rs 53,500, currently receiving Rs 24,610 as 46% DA would get Rs 26,750 DA after the hike – a salary boost of Rs 2,140 per month plus arrears. Similarly, pensioners will gain higher relief every month.
The Labour Ministry releases Consumer Price Index for Industrial Workers monthly based on which DA is calculated. Despite easing inflation recently, DA has been raised successively over the last two years highlighting government employees’ purchasing capacity needs. Most expect another raise in line with precedent.
