The central government is likely to increase the dearness allowance (DA) for its over one crore employees and pensioners by three per cent to 45 per cent. The latest hike in dearness allowance will be effective from July 1, 2023. While the decision is yet to be taken, All India Railwaymen Federation General Secretary Shiva Gopal Mishra said that they are seeking a four per cent hike in dearness allowance.
“The CPI-IW for June 2023 was released on July 31, 2023. We are demanding a four percentage point hike in dearness allowance. But the dearness allowance hike works out to be a little over three percentage points. The government does not factor in hiking DA beyond the decimal point. Thus DA is likely to be increased by three percentage points to 45 per cent,” Mishra told PTI.
The dearness allowance is revised periodically twice a year. The last DA hike revision took place on March 24, 2023, and was effective from January 1, 2023. This time, the central government had increased the DA by four percentage points from 38 per cent to 42 per cent based on the percentage increase in the 12 monthly average of the All India Consumer Price Index for the period ending December 2022.
The Union Cabinet, headed by Prime Minister Narendra Modi, had approved the release of an additional installment of dearness allowance to central government employees and dearness relief to pensioners, due from January 2023. Union Minister Anurag Thakur said at the time that the Centre will spend Rs 12,815 crore to fund the hike in DA, which benefitted around 47.58 lakh employees and around 69.76 lakh pensioners.
The dearness allowance for employees and pensioners is calculated by factoring in the latest Consumer Price Index for Industrial Workers (CPI-IW) brought out by the Labour Bureau every month. The government provides employees and pensioners with DA to compensate them for the impact of rising prices on their existing salaries. The cost of living increases over a period of time, which is reflected in the CPI-IW index.
(With PTI inputs)