The government has retired its decision that 2% DA should be given as an increase to the central government employees and pensioners. The orders for this have already been passed into effect, and now the DA rates will be applicable from the stipulated date as per the notification by the Finance Ministry.
When raised, the DA serves as a percentage of an employee’s/pensioner’s basic pay, furnishing him/her with some relief from inflation and rising cost of living. This 2% rise is set to benefit more than 47 lakh central government employees and over 69 lakh pensioners in India.
DA Increase As Per Inflation Index
The Dearness Allowance, as per the norms, is revised twice a year, once in January and the other in July, based on the All India Consumer Price Index (AICPI) for Industrial Workers, which accounts for inflation on the central level. This 2% increase fits well into the stated formula, considering the recent uptrend in prices of essential commodities.
Officials confirmed that the Department of Expenditure has issued the order, instructing government departments to effect the revised DA in the next salary cycle, including arrears for previous months, where applicable.
Financial Impact And Benefits
While the percentage appears modest, at the macro level, the accumulation of financial impact weighs on the employees as well as the government. Consider the situation for a central government employee with a basic pay of ₹40,000; an increase of ₹800 shall mean an additional installment of ₹9,600 per annum.
Again, this decision also acts as a kind of yardstick with which PSUs and some states set their DA as many follow the central DA pattern.
Pensioners Are Included
The DR to pensioners has also gone up by 2% so that the retirees can benefit with equal share from the revision. This is definitely a welcome step, especially for our senior citizens depending on fixed pensions amidst inflationary pressure.
Conclusion
Although modest, the 2% DA hike brings timely relief to lakhs of employees and pensioners, underlining the government’s continual efforts to cushion against inflation. With actual inflation trends continuing, attention will now shift to the next DA hike expected to take place in July 2025, to evaluate if a bigger hike could be warranted.
Also Read :New Govt Pension Scheme: Senior Citizens To Get RS 20,000 Monthly