The central government is expected to raise the dearness allowance (DA) for its vast workforce, including over one crore employees and pensioners, by three percentage points. This will take the DA percentage from the current 42% to 45%. The hike is based on the agreed formula that considers the latest Consumer Price Index for Industrial Workers (CPI-IW) data, released monthly by the Labour Bureau.
New Dehli- Shiva Gopal Mishra, the General Secretary of All India Railwaymen Federation, informed PTI that the demand was for a four percentage point increase, but it has been settled at a little over three percentage points due to government policy of not hiking beyond the decimal point. The expenditure department of the Finance Ministry will propose the DA hike, along with its financial implications, to the Union Cabinet for approval.
The DA increase will be effective from July 1, 2023, benefiting the employees and pensioners who are currently receiving a 42% DA. The last revision in DA occurred on March 24, 2023, and was applicable from January 1, 2023, when it was increased by four percentage points based on the 12 monthly average of the All India Consumer Price Index up to December 2022.
The DA is provided to employees and pensioners as a way to offset the impact of rising prices and cost of living changes, which are reflected through the CPI-IW. The allowance is reviewed twice a year to ensure it aligns with the changing economic conditions.