Diwali 2024: Bonanza for central government employees likely? Union Cabinet may hike DA by 3%

The Prime Minister Narendra Modi-led Union Cabinet is likely to give a Diwali bonanza to central government employees. The Union Cabinet is expected to hike the dearness allowance for central government employees by around 3 per cent, sources within the government told Business Today. 

If approved, the dearness allowance for central government employees will go up from 50 per cent to 53 per cent of the basic pay.

After the 3 per cent DA hike, salary of an entry-level government employee, who has a basic salary of roughly Rs 18,000 per month, will go up in the range of Rs 540 per month. The DA hike will be effective from July 1, 2024. 

The hike is expected to benefit over 1 crore central government employees and pensioners. Central government employees will also receive arrears for the months of July, August, and September. 

Last month, the Confederation of Central Government Employees and Workers wrote to Union Finance Minister Nirmala Sitharaman regarding the delay in DA/DR hike announcement.

While DA is given to central government employees, Dearness Relief (DR) is given to pensioners. Usually, the central government hikes DA twice a year, effective from January and July. There, however, has been a significant delay in announcing the July DA hike this year. 

In the letter to Sitharaman, the confederation's general secretary SB Yadav said: "There is discontent among employees and pensioners due to the delay in the announcement of DA/DR."

It also mentioned that the Durga Puja is approaching and the government is yet to announce the performance-linked bonus (PLB) and adhoc bonus. 

Dearness allowance (DA) is a key part of government employees' salaries and is calculated on the basis of the All India Consumer Price Index (AICPI), which tracks variations in retail prices.