Central government employees in India are anxiously awaiting the announcement of the July Dearness Allowance (DA) hike. Although there is no official confirmation on the announcement date, media reports suggest that the decision is likely to be revealed in September 2023.
The context for this anticipation lies in the recent surge in retail inflation in the country, reaching a 15-month high in July. As a response to this inflationary trend, the government is expected to increase the dearness allowance by 3 percentage points, raising it to 45%. The new DA rate will be applicable from July 1, 2023.
The calculation of dearness allowance for central government employees and pensioners is based on the latest Consumer Price Index for Industrial Workers (CPI-IW), which is released by the Labour Bureau on a monthly basis.
All India Railwaymen Federation General Secretary Shiva Gopal Mishra provided insights into the upcoming DA hike. He mentioned that the demand has been for a four percentage point increase in dearness allowance. However, due to the government’s practice of not considering DA increments beyond the decimal point, the likely increase will be slightly over three percentage points, resulting in a 45% DA rate.
Mishra further explained that the expenditure department of the finance ministry will prepare a proposal for the DA hike, along with its financial implications. This proposal will then be presented to the Union Cabinet for approval. Subsequently, the announcement of the DA hike will be made.
Presently, more than one crore central government employees and pensioners receive a 42% dearness allowance. While employees receive Dearness Allowance (DA), pensioners are provided with Dearness Relief (DR). These allowances are typically revised twice a year, in January and July.
In the previous adjustment, the DA was increased by 4% to reach 42% in March 2023. Given the prevailing inflation rate, the upcoming DA hike is anticipated to be around 3%, as indicated by various reports. The impending announcement holds significance for the central government workforce as they navigate economic conditions and cost of living adjustments.