7th Pay Commission: DA Hike Announced! Central Govt approves 4% increase in dearness allowance

DA Hike Announced, DA Hike News Today, DA Hike Central Government Employees: The Union Cabinet has on Thursday approved DA hike or a 4 per cent increase in dearness allowance (DA). After this DA/DR hike, the dearness allowance (DA) and dearness relief (DR) will increase from 46 per cent to 50 per cent. 

After the DA hike, the dearness allowance of 50 per cent of basic pay will be effective from January 1 this year, and the Central Government Employees and pensioners will received arrears if applicable.

Also Read | DA Hike Announced: How is dearness allowance calculated for central government employees?

Union Minister Piyush Goyal informed after the Cabinet meeting that the "Union Cabinet has approved to release an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners from January 1, 2024, representing an increase of 4 percentage points over the existing rate of 46 per cent of the basic pay/pension, to compensate against price rise."

Also Read | 7th Pay Commission: Centre increases tax exemption limit on gratuity from Rs 20 lakh, know details

Apart from the dearness allowance hike, there has also been a 25 per cent increase in transport allowance, canteen allowance, and deputation allowance.

House Rent Allowance or HRA has also been raised for different categories from 27 per cent to 30 per cent, from 19 per cent to 20 per cent, and from 9 per cent of basic pay to 10 per cent. 

Also Read | 7th Pay Commission: Along with 4% DA, Centre also hikes HRA; know new limits

Gratuity benefits have also been raised by 25 per cent with an increase ceiling of Rs 25 lakh from the existing Rs 20 lakh.

From this hike, approximately 49.18 lakh employees and 67.95 lakh pensioners will benefit.

The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be Rs 12,869 crore per annum. The impact would be Rs 15,014 crore during the year 2024-25 (January 2024 to February 2025).

#WATCH | Union Cabinet approves hike in Dearness Allowance to govt employees and Dearness Relief to pensioners by 4% from January 1, 2024, announces Union Minister Piyush Goyal. pic.twitter.com/IsWUnwBGHW

— ANI (@ANI) March 7, 2024

DA Hike: Dearness Allowance Formula 

For central government employees, the calculation that is used to formulate the dearness allowance is —

Dearness Allowance Hike Formula - [(Average of All India Consumer Price Index AICPI) for the last 12 months - 115.76)/115.76]×100. 

For PSU personnel, DA hike is calculated by the below mentioned formula —

For employees working in PSUs (Public Sector Units), the formula used to calculate the Dearness Allowance is -[Average of Consumer Price Index for the last 3 months (Base Year 2001 = 100)-126.33)] x100