DA Hike Update: Employees' Wait For Cabinet Nod Turns Longer

The wait for central government employees for an increase in the dearness allowance (DA) turned longer as the Centre made no announcement related to the DA hike following the Union Cabinet meeting on Wednesday.

Ahead of the Cabinet meeting, employee unions expected a hike of at least 3% in the DA paid to employees and a similar increase in the dearness relief (DR) paid to pensioners.

The DA and DR, revised on a biannual basis by the Centre, benefit around one crore employees and pensioners. The revision aims to offset the impact of inflation.

In March, the Centre raised the dearness allowance by 4%, effective from January 2024. This increase took the overall DA component in the salary of government employees from 46% to 50% of the basic pay.

The formula to revise the allowance is based on the average of the All India Consumer Price Index (AICPI) for the previous 12 months. This makes it a key aspect for calculating the salaries of government employees and the pension paid to retirees.

A slew of other allowances, including house rent allowance, were also revised earlier this year when the DA reached 50% of the basic pay, the Confederation of Central Government Employees confirmed. This was done in accordance with the provisions of the 7th Pay Commission.

The 7th Pay Commission, which was the last pay panel formed in 2014, proposed that the basic pay should be automatically revised once the DA crosses 50%, employee unions said. "They had proposed it, but it was not part of the final list of recommendations approved by the government," All Indian Railwaymen's Federation chief Shiv Gopal Mishra said.