The new year is expected to bring good news for central government employees, with the possibility of Dearness Allowance (DA) increasing to 56 percent.
Currently, the dearness allowance in the country stands at 53 percent, and the government may raise it by 3 percent.
If this happens, the dearness allowance for central government employees could rise from 53 percent to 56 percent.
This increase is based on the All India Consumer Price Index (AICPI) data until October 2024.
The government may announce this at any time, but it will be effective from January 1, 2025.
AICPI Index and Dearness Allowance
The DA is calculated based on the AICPI index, which is published at the end of each month.
The dearness allowance is then revised approximately every six months. The AICPI index stood at 143.3 in September 2024 and rose to 144.5 in October 2024.
However, the data for November 2024 is still pending, which was expected to be released on December 31.
It is now anticipated that the figures for both November and December 2024 will be released together on January 31, 2025.
DA for Central Employees May Rise to 56%
Since July 2024, employees have been receiving a 53 percent dearness allowance.
Based on the AICPI data up to October 2024, the DA has already surpassed 55 percent.
If the figures for November and December also follow this trend, the new DA hike could be announced in March 2025.
Historically, the government has announced DA hikes in March, ahead of Holi.
If this happens, the hike will be considered effective from January 1, 2025, and employees will also receive DA arrears for two months.
Impact of DA Increase
Even a 1 percent increase in DA significantly impacts employees’ salaries.
Dearness allowance is provided to help employees cope with rising inflation, increasing their spending power.
This also leads to a rise in pensioners’ pensions. However, the increase in DA puts pressure on the government’s finances.
Despite this, the move is made to improve employees’ financial well-being and help them manage inflation and purchasing power.
