Central government employees are in for a financial boost with an expected 3-4% increase in dearness allowance (DA) in September. This follows the previous DA adjustment made in March 2024. Here’s what you should know about the upcoming hike and other related updates.
Upcoming DA Hike
The central government is anticipated to announce a 3-4% DA hike for its employees in the third week of September 2024. While a 3% increase is confirmed, there is a possibility that it could reach 4%. This adjustment follows a 4% rise in March 2024, which brought the DA to 50% of basic pay.
COVID-19 DA Arrears
Despite expectations, the government is unlikely to release the 18-month DA and dearness relief (DR) arrears withheld during the COVID-19 pandemic. Union Minister of State for Finance, Pankaj Chaudhary, recently confirmed that these arrears will not be disbursed.
Future of DA and Pay Commission
Currently, there are no plans to merge DA with basic pay, even if DA exceeds 50%. Instead, allowances like HRA may be adjusted. The formation of the 8th Pay Commission is not under consideration, with the 7th Pay Commission’s recommendations still in effect.
Calculation of DA Hike
The DA and DR hikes are calculated based on the average increase in the All-India Consumer Price Index (CPI-IW). The percentage change in DA is announced twice a year, typically in March and September, based on the CPI averages.