Good news for government employees; another DA hike likely by August

Government employees are expecting to hear positive news about their salary shortly. According to reports, the Centre may announce another increase in dearness allowance (DA) in July or August. Based on retail inflation statistics, the DA and DR are changed twice a year in January and July. The retail inflation rate for April is expected to be released this week. In March, inflation increased to 7% from 6.1% in February. It increased mostly owing to an increase in food products.

The food basket inflation rate during the month was 7.68%, up from 5.85 percent in February.

According to sources, the dearness allowance will be hiked by another four percent in July, bringing the total to 38%.

Also Read | Dearness allowance increased by 3% for Central govt employees

The Union Cabinet authorised a rise of 3% in dearness allowance (DA) under the 7th Pay Commission in March, bringing the DA to 34% of basic income. This action benefits approximately 50 lakh government employees and 65 lakh pensioners. The DA and DR have just been raised by the government. Since the moratorium was removed in July 2021, DA and DR have witnessed three rises and nearly doubled. Dearness allowance is paid to government employees, whereas dearness relief is paid to retirees.

In light of the unique scenario created by the COVID-19 epidemic, the federal government withheld three instalments of DA and DR for January 1, 2020, July 1, 2020, and January 1, 2021. In a written response to a question in the Rajya Sabha in August last year, Finance Minister Nirmala Sitharaman stated that withholding DA and DR saved around Rs 34,402 crore.

Also Read | Big cheer for employees as Karnataka government raises dearness allowance from 24.5% to 27.2%

• 7th Pay Commission
• COVID-19
• Nirmala Sitharaman
• dearness allowance
• government employees
• Union Cabinet