Centre Announces 3% DA Hike for Employees Ahead of Diwali

The Union Cabinet, led by Prime Minister Narendra Modi, approved a 3% increase in the dearness allowance (DA) and dearness relief (DR) for Central government employees and pensioners on Wednesday. This raises the DA from 50% to 53%, effective from July 1, providing significant relief just before Diwali.

This biannual revision affects approximately one crore Central government employees and pensioners, helping to counteract inflationary pressures. The DA is determined based on the Consumer Price Index for Industrial Workers (CPI-IW), which is published monthly by the Labour Bureau, making it a key factor in government salaries and pensions.

In March, the government had previously raised the DA by 4%, bringing the total to 50% of basic pay. According to the Seventh Pay Commission report, various allowances, including house rent allowance, automatically increase once the DA exceeds 50% of basic pay, and these adjustments were made earlier this year.

While the DA has been revised, there have been no changes to the basic pay, as such recommendations were not included in the final report of the Seventh Pay Commission.

Additionally, Chhattisgarh Chief Minister Vishnu Dev Sai announced a 4% increase in DA for state government employees ahead of Diwali, raising it to 50% of basic salary, effective from October 1.