DA for central government employees raised by 2% to 55%
What's the story
The Union Cabinet has approved a 2% hike in the Dearness Allowance (DA) of central government employees, increasing it from 53% to 55%.
The move is aimed at helping offset inflation and will increase the salaries of employees ahead of the upcoming 8th Pay Commission.
It will benefit nearly 48.66 lakh employees and 66.55 lakh pensioners.
The last DA hike was in July 2024, when it was hiked from 50% to 53%.
DA explained
Understanding Dearness Allowance (DA) and its significance
Dearness Allowance (DA) is a financial benefit given to government employees to counter inflation and keep their salaries in tune with rising living costs.
For pensioners, this benefit is called Dearnes Relief (DR).
While basic salaries are fixed by a pay commission every 10 years, DA ensures periodic hikes to help employees cope with inflation.
The latest hike will benefit central government employees, pensioners, and family pensioners.
Calculation
How DA is determined and its impact on salaries
The government decides DA rates on the basis of All India Consumer Price Index for Industrial Workers (AICPI-IW) data, reviewing the last six months' numbers before making any revision.
A 2% hike in DA would increase the salary of an entry-level employee with a basic pay of ₹18,000 by ₹360.
For instance, an employee with a basic pay of ₹18,000 currently gets ₹9,540 as DA (53%).