Dearness Allowance (DA) Hike Update: The Center Is Likely To Raise It By 3% To 45%

According to the agreed-upon formula for the purpose, the federal government is set to raise the dearness allowance (DA) for its more than one crore workers and pensioners by three percentage points, to 45 percent from the current 42 percent.

The Labour Bureau releases the most recent Consumer Price Index for Industrial Workers (CPI-IW) each month, which is used to calculate the dearness allowance for workers and retirees.

A division of the Labor Ministry is the Labor Bureau.

Shiva Gopal Mishra, general secretary of the All India Railwaymen Federation, told PTI, “The CPI-IW for June 2023 was announced on July 31, 2023. We want the dearness allowance to increase by four percentage points. But the increase in the dearness allowance amounts to only a little bit over three percentage points. Beyond the decimal point increases in DA are not taken into account by the government. Therefore, it is anticipated that DA will rise by three percentage points to 45%.

He continued by saying that the Finance Ministry’s spending division will draft a proposal to increase DA along with the income implications and submit it for approval to the Union Cabinet.

The increase of DA will take effect on July 1, 2023.

The current dearness allowance is 42% for the more than one crore central government workers and pensioners.

The most recent DA modification was completed on March 24, 2023, and it took effect on January 1, 2023.

Based on the percentage rise in the 12-month average of the All India Consumer Price Index for the period ending December 2022, the Centre hiked DA by four percentage points to 42 percent.

Employees and pensioners get the DA as a price-inflation benefit.

Over time, the cost of living rises and is represented in the CPI-IW. Twice a year, the allowance is adjusted regularly.