Cabinet hikes dearness allowance (DA) by 4% for central government employees; check details here

The Centre has hiked the dearness allowance by 4 per cent for all the government employees taking the total to 42 per cent from 38 per cent. Union Minister Anurag Thakur on Friday said the Centre will spend Rs 12,815 crore to fund the hike in dearness allowance, or DA, which will benefit over 1 crore employees of the central government.
The Centre said that the Cabinet approved the release of an additional installment of Dearness Allowance (DA) to Central Government employees and Dearness Relief to Pensioners, which is due from the beginning of January 2023. This will benefit 47.58 lakh employees and 69.76 lakh pensioners.

This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission. It is revised twice a year -- in January and July -- as per government rules. Last DA hike was announced on September 28, 2022, which got effective from July 1, 2022.

In its press release, the Centre said: "The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi, today has given its approval to release an additional installment of Dearness Allowance to Central Governments employees and Dearness Relief to Pensioners with effect from 01.01.2023. The additional instalment will represent an increase of 4 per cent over the existing rate of 38 per cent of the Basic Pay/Pension, to compensate against price rise."

Dearness Allowance is a component of the salary paid to Central Government employees to offset the impact of inflation on their existing salaries. It is calculated as a percentage of the employee's basic salary, and is based on the latest Consumer Price Index for Industrial Workers (CPI-IW). The goverment's Labour Bureau publishes the CPI-IW data every month.