Union Cabinet approves 4% hike in DA to government employees

The Union Cabinet on Thursday gave its nod to hike dearness allowance (DA) for central government employees by 4 per cent, which will cost Rs 12,869 crore per annum to the state exchequer. Post this hike, dearness allowance and dearness relief (DR) will touch 50 per cent. As many as 49.18 lakh employees and 67.95 lakh pensioners will benefit from the DA hike. Every year, DA and DR are usually raised twice -- January and July.

The central government employees and pensioners will get a benefit of Rs 24,400 crore with the allowance hike, Union Minister Piyush Goyal said on Thursday.

The last hike in dearness allowance and dearness relief was made in October 2023 when the Union Cabinet had increased it by 4 percentage points to 46 per cent with effect from July 1, 2023.

The Centre decides on the quantum of hike based on the CPI data for industrial workers. As per reports, the 12-month average is at 392.83. Based on this, DA will be at 50.26 per cent of basic pay.

The Labour Bureau, a wing of the Ministry of Labour, publishes the CPI-IW data every month.