Government Approves 4% DA Hike, Boosts Economy With Rs 12,869 Crore - Great News For Pockets

As announced by Union Minister Piyush Goyal, the Union cabinet approved a 4 per cent hike in Dearness Allowance (DA) for Central Government employees and Dearness Relief (DR) for pensioners, effective from January 1, 2024.

This increase raises the dearness allowance and dearness relief (DR) to 50 per cent, from the existing rate of 46 per cent.

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Government Approves 4% DA Hike

The government stated that the combined impact on the exchequer due to both Dearness Allowance and Dearness Relief would amount to Rs. 12,868.72 crore per annum, benefiting approximately 49.18 lakh Central Government employees and 67.95 lakh pensioners.

This rise in DA and DR is following the accepted formula based on the recommendations of the seventh Central Pay Commission, with the quantum of the hike being determined by the central government based on the CPI data for industrial workers, which currently stands at a 12-month average of 392.83.

The Labour Bureau, a wing of the Ministry of Labour, publishes the CPI-IW data monthly. It should be noted that DA is for employees and DR is for pensioners. Typically, DA and DR are increased twice a year, in January and July. The last hike occurred in October 2023, when DA was raised by 4 per cent to 46 per cent.