The declaration was made by the Indian government, that the Dearness Allowance (DA) and Dearness Relief (DR) will increase by up the 3% as of July 1, 2024. The decision was made by Prime Minister Narendra Modi presided over the Cabinet meeting on October 16, 2024. The main purpose of this increment is to keep government employees and pensioners financially stable and able to meet the growing expense of living.
- The government employees will receive the increment of the 3% under the DA.
- The benefit of the DA was given from the 1st of July 2024.
- At now, more than 1 crore employees will get benefits from this hike.
- The DA is now increased from 50% to 53%.
Impact on Employees and Pensioners
The Employees and Pensioners will benefit from this DA Hike.
1. Employees: The govt employees will now get the higher DAs by which the salary of the government employees increases. Example: The DA of the employees at 50% was Rs.9000/- when the base pay was Rs.18000. After the increment of 3%, the DA is now 53% which is Rs.9540/-.
2. Pensioners: The increment under the Dearness Relief (DR) offers financing relief amid inflation. The monthly payouts will be increased for the Pensioners on the basis of the same percentage. By this adjustment, the retirees get relief and manage the rising cost of living effectively.
DA Hike 2024: Overview
| Effective Date | July 1, 2024 |
| Budget Allocated | ₹9448 crore |
| Current DA Percentage | 53% of basic pay |
| Beneficiaries | Over 1 crore employees & pensioners |
| Percentage of Hike | 3% |
Arrears and Budgetary Impact
As the raise which takes place into the ninth of the July on first date, the employees and pensioners will be compensated for July through October of that year. The government expected fiscal impact from this raise is 9448 crore into the DA and DR adjustments.
How is DA Calculated?
Based on the All India Consumer Price Index (AICPI), the DA is calculated which shows the living cost. The calculation of the DA is as follows:
- DA% = ((Average of AICPI (Base Year 2001=100) for the past 12 months – 115.76) / 115.76) × 100
Central public sector employees:
- DA% = ((Average of AICPI (Base Year 2001=100) for the past 3 months – 126.33) / 126.33) × 100
In January and July, the govt revised the DA.
Example:
- Basic Pay: ₹25,000
- Previous DA at 50%: ₹12,500
- New DA at 53%: ₹13,250
- Increase: ₹750/month
Benefits of the DA Hike
- Improved Financial Stability: The Financial stability will improve as the increment takes place. The employees will now effectively cope with the inflation.
- Wider Reach: With this benefit, more than 1 crore individuals are happy.
- Counteracting Inflation: DA changes make sure that growing expenses don’t impact purchasing power.
FAQs
Q: When will the DA be revised?
Ans: DA will often revised twice a year by the government mainly into January and July.
Q: How many employees will get benefits under this?
Ans: Over 1 crore employees & pensioners are benefited by this.