Shruti Suman
On Wednesday, the central government announced a 4% hike in dearness allowance for its more than one crore employees and retirees. This decision will raise the dearness allowance for central government employees from the current 42% to 46%. Central employees and retirees have eagerly awaited this dearness allowance increase since July, as the last revision was made on March 24, 2023.
This long-awaited decision coincides with the ongoing festive season and is being hailed as a ‘Diwali gift’ for thousands of central government employees and retirees. As a result, central government employees will receive increased salaries starting in November, along with arrears for the period spanning from July to October.
Dearness allowance (DA) is an element of the salary paid to central government employees to counteract the effects of inflation on their income. It is calculated as a % of the employee’s basic salary and typically adjusted twice a year, in January and July.
Impact of the 4% DA Hike on Salaries:
For those with a minimum basic salary set at Rs 18,000, their monthly salary increase will rise to Rs 8,280 at a 46% DA rate. Currently, their 42% DA results in an additional monthly income of Rs 7,560.
Meanwhile, individuals with a maximum basic salary of Rs 56,900, who currently receive Rs 23,898 as part of their monthly earnings with a 42% DA rate, will see their monthly earnings increase to Rs 26,174 with the 46% DA hike.
Additionally, the government has also approved Diwali bonuses for Group C and non-gazetted Group B level officials, including paramilitary forces. For the fiscal year 2022-2023, the finance ministry has set a limit of ₹7,000 for calculating non-productivity linked bonuses (ad hoc bonuses) for central government employees.
