The Union Cabinet approved increasing the dearness allowance of central government employees by three percentage points. This increase will be effective from July 1, 2024. For example, if the basic salary is Rs 40,000, a 3% increase in dearness allowance (DA) will result in an additional Rs 1,200 per month. With this, the total DA will increase from Rs 20,000 to Rs 21,200 per month. This increase will significantly increase their disposable income as they prepare for the upcoming festive season. With this, central government employees will get the revised DA of October salary as well as the arrears of the last three months.
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Pensioners will also benefit from this announcement, as the Dearness Relief (DR) will be adjusted accordingly. The DA hike is determined based on the All India Consumer Price Index (AICPI), reflecting the government’s ongoing commitment to support employees facing rising cost of living. Dearness Allowance is a cost-of-living adjustment paid to government employees, pensioners and public sector employees. Its primary purpose is to help reduce the effects of inflation by adjusting salaries and pensions in line with rising prices.
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DA is revised twice a year based on the inflation rate measured by AICPI, thereby ensuring that the purchasing power of employees and pensioners is maintained despite fluctuations in market conditions. DA increased to 50% in March 2024 after the previous 4% increase.
