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The dearness allowance (DA) received by central employees has been increased by 2%. The DA hike in the cabinet meeting held on Friday (March 28) was decided. Earlier in July 2024, the government increased 3%.
Before the implementation of the 8th Pay Commission, dearness allowance has increased from 53% to 55% due to this increase. About 50 lakh central employees and 65 lakh pensioners will benefit from this.
DA grows every 6 months. Increased DA will be applicable from 1 July. That is, employees will get 3 months arrears. The Economic Times has given this update quoting sources.
DA is given to deal with inflation
Dearness allowance is such a money that is given to maintain the standard of living of government employees despite rising inflation.
This money is received to government employees, public sector employees and pensioners. Its calculation is done every 6 months according to the current inflation of the country.
It is calculated according to the basic salary of the employees on the basis of the related pay scale. Dearness allowance may vary from urban, semi-urban or rural areas.
How is the calculation of dearness allowance?
A formula has been given for determination of dearness allowance. (Average of the last 12 months All India Consumer Price Index (AICPI) – 115.76) /115.76]× 100.
Now if we talk about dearness allowance of people working in PSU (Public Sector Units), then the method of its calculation is-
Dearness allowance percentage = (Base Year 2001 = 100) -126.33)
What is All India Consumer Price Index?
There are two types of inflation in India. One retail means retail and the other wholesale inflation. Retail inflation is based on prices paid by common customers. It is also called Consumer Price Index (CPI).
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