Centre's Diwali gift: DA hike to benefit 1 crore employees, pensioners

The Union Cabinet has cleared a 3 percent hike in dearness allowance (DA) for Central government employees ahead of Diwali.

NDTV reported on Wednesday that with this hike, the DA has now increased to 53 percent. This change is expected to benefit over a crore Central government employees and pensioners, with employees also likely to receive arrears.

Inflation compensation

The DA is a percentage of employees' basic salary designed to help mitigate the effects of inflation on their living expenses. This allowance is typically revised every six months to reflect fluctuations in the cost of living index.

The DA is determined by the All-India Consumer Price Index (AICPI), which monitors retail price fluctuations and is updated twice annually. An increase in DA results in higher take-home pay for government employees, offering some relief as inflation continues to affect households.

Last year, the government announced an increase before the festive season. This year, the Himachal Pradesh government has surprised its employees with an early Diwali gift by implementing a 4 percent DA hike just before Dussehra. This change is anticipated to benefit 1,80,000 employees and 1,70,000 pensioners in the state.

The Centre typically raises the dearness allowance and dearness relief for employees and pensioners twice a year, in January and July, with announcements generally occurring in early March and October.

Chattisgarh too

Chhattisgarh Chief Minister Vishnu Deo Sai has announced that the DA of State government employees will be increased by 4 percent, taking it to 50 percent of the basic salary. The decision will benefit nearly 3.9 lakh state government employees and the hike will be effective from October 1 this year, officials said.

As the Diwali festival is approaching, the government has decided to increase DA by 4 percent, bringing it at par with the central government, Mr Sai told reporters.

(By arrangement with livemint.com)