The central government raised employees’ Dearness Allowance (DA) before the Lok Sabha elections began.
Following the 4 percent increase in DA, the DA for central government employees reached 50 percent of their basic pay.
This led to expectations of raising other allowances such as Retirement Gratuity and Death Gratuity.
The central government has also made this announcement. The limit for retirement and death gratuity has been raised by 25 percent, from Rs 20 lakh to Rs 25 lakh.
The increase will take effect from January 1, 2024, and will greatly benefit the employees.
The decision taken on 30 April was withdrawn on 7 May
As per the office memorandum from the central government dated May 30, retirement gratuity and death gratuity are being increased by 25 percent following the recommendations of the 7th Pay Commission and the Central Civil Services (Pension) Rules, 2021.
This means central employees will now receive a gratuity of Rs 25 lakh. Initially, the decision to raise gratuity was made on April 30 but was halted by a circular issued on May 7.
After the center, many state governments also increased DA
The central government had planned to apply the raised DA starting January 1, 2024.
The DA for central employees saw an increase in March 2024. This increase in Dearness Allowance and Dearness Relief brought relief to many employees and pensioners.
As a result of the central government’s decision, several state governments also raised the DA for their employees ahead of the elections.
What is gratuity, who gets the benefit
As per the rules, an employee who has worked continuously for at least 5 years is eligible to receive gratuity.
According to the Payment of Gratuity Act, 1972, this gratuity amount is received only upon termination of service, death, or resignation of the employee.
