DA Hike: Centre announces 4% DA hike for its employees

Tjhe central government gave a Holi gift to crores of its employees and pensioners on Thursday evening as it announced a four per cent hike in Dearness Allowance (DA) and Dearness Relief (DR) to its employees and pensioners, respectively.

After Thursday's hike, the DA/DR of the central government employees will increase from 46 per cent to 50 per cent.     

The new rates of DA will be 50 per cent of the basic pay and will be effective from January 1, 2024.

The employees/pensioners will get arrears if applicable. 

Union minister Piyush Goyal informed on Thursday that the central government had decided to increase the DA/DR by four per cent. 

Earlier, IANS reported on Wednesday that the central government was likely to announce a 4 per cent hike in DA/DR this month to compensate employees for inflation.

As per the recommendations of the 7th Pay Commission, if the DA reaches 50 per cent, there will also be a hike in the house rent allowance, children's education allowance, transport allowance, etc. 

With these hikes, the central government staff's take-home pay package will increase significantly.

How is DA calculated?

DA for central government employees is calculated based on the latest Consumer Price Index for Industrial Workers (CPI-IW). 

CPI-IW data is published by the Labour Bureau, a wing of the Ministry of Labour, every month. 

CPI-IW for the month of January is 138.9.

Centre usually revises DA twice a year, in January and July.

The central government had announced the previous DA hike on October 18, 2023, which came into effect from July 1, 2023.

Before that hike, the DA was announced on March 24, 2023, which came into effect from January 1.