Hike in DA: 48.67 lakh Central govt employees, 67.95 lakh pensioners to benefit; Centre to spend Rs 12,850 cr

The Union Cabinet, headed by PM Narendra Modi, has approved an increase in the dearness allowance (DA) for 48.67 lakh central government employees, 67.95 lakh pensioners by four percentage points. Now, the revised dearness allowance will be 46 per cent from 42 per cent, Union Minister Anurag Thakur said today. The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be Rs.12,857 crore per annum, Thakur added.

"The Union Cabinet, chaired by the Prime Minister, Shri Narendra Modi has approved to release an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 01.07.2023 representing an increase of 4 per cent over the existing rate of 42 per cent of the Basic Pay/Pension, to compensate against price rise. This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission," the government notification said.

"The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be Rs 12,857 crore per annum. This will benefit about 48.67 lakh Central Government employees and 67.95 lakh pensioners," it added.

Dearness Allowance (DA) can be defined as a cost-of-living adjustment allowance provided to public sector employees by the government. It is calculated on the basis of the latest Consumer Price Index for Industrial Workers (CPI-IW).

There is a fixed formula for calculating dearness allowance of central government employees and pensioners.

For Central Government Employees

DA% = [(Average of AICPI (Base Year 2001 = 100) for the last 12 months – 115.76)/115.76] x 100 

For Public Sector Employees

DA% = [(Average of AICPI (Base Year 2001 = 100) for the last 3 months – 126.33)/126.33] x 100

The last revision in DA was done on March 24, 2023, and was effective from January 1, 2023.

The government has already sanctioned Diwali bonuses for Group C and non-gazetted Group B level officials, which includes paramilitary forces.

For the fiscal year 2022-2023, the finance ministry has established a cap of Rs 7,000 for computing non-productivity linked bonuses (ad hoc bonuses) for central government employees.

Besides, the Centre has also approved payment of Productivity Linked Bonus (PLB) of Rs 1,968.87 crore to 11,07,346 railway employees. The payment is equivalent to 78 days’ wages for the financial year 2022-23 to all eligible non-gazetted Railway employees, such as track maintainer, loco pilots, train managers (Guards), station masters, supervisors, technicians, technician helpers, pointsman, ministerial staff and other Group ‘C’ staff (excluding RPF/RPSF personnel).

"The performance of Railways in the year 2022-2023 was very good. Railways loaded a record cargo of 1509 Million Tonnes and carried nearly 6.5 Billion Passengers. Many factors contributed to this record performance. These include improvement in infrastructure due to infusion of record Capex by the Government in Railways, efficiency in operations and better technology etc. Payment of PLB will act as an incentive to motivate the Railway employees for working towards further improvement in performance," a government notification stated on Wednesday.

Also WATCH: AirAsia CEO slammed over topless massage during meeting row. Know all about serial entrepreneur Tony Fernandes, who once bought AirAsia for less than $1; his net worth, family and more