DA Hike: Modi government’s gift to central employees, DA hiked by 2%; Cabinet approves

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DA Hike: The Union Cabinet has approved a 2% hike in Dearness Allowance (DA) for central government employees. With the implementation of this decision, DA will increase from 53% to 55%. Let us know about this in detail.

The Union Cabinet has approved a 2% increase in Dearness Allowance and Dearness Relief (DA and DR) for central government employees. Union Minister Ashwini Vaishnav announced this on Friday. With this amendment, DA and DR will increase from 53% to 55%. This will increase the salary of employees and pension of retired employees. The last time DA was increased was in July 2024, when it was increased from 50% to 53%.

The combined impact on the exchequer due to the increase in both DA and DR will be Rs 6,614.04 crore per year. This decision of the government will benefit about 1.15 crore central government employees and pensioners.

Announcing the cabinet decision, the Union Minister said that the decision related to additional DA and DR will come into effect from January 01, 2025 and the government will spend an additional Rs 7,716 crore on this item. The rate of DA is decided on the basis of the increase in the 12-month average of the All India Consumer Price Index (AICPI-IW). After this increase, the government will spend an additional Rs 3,622 in the DA increase item. At the same time, an additional expenditure of Rs 2,992 will be incurred in the DR item.

Dearness Allowance (DA) is an allowance given to government employees to help them cope with rising inflation. Its purpose is to ensure that salaries do not lose their value due to rising inflation. The basic salary of employees is determined by the Pay Commission every 10 years. Additionally, DA is revised from time to time to keep pace with inflation.