The Union Cabinet is expected to take up the proposal to raise Dearness Allowance (DA) for central government employees and pensioners in its meeting today, sources told media. The revised DA, once approved, will come into effect from July 1.
The move is aimed at providing relief to nearly one crore central government employees and pensioners. Dearness Allowance is a cost-of-living adjustment that the government pays to its employees and pensioners to offset the impact of inflation on their household expenses.
According to sources, the Cabinet will take a final call during its scheduled meeting today. If cleared, the decision will benefit both serving employees and retired staff.
The hike is expected to be in line with the recommendations based on the Consumer Price Index (CPI) data for industrial workers, which forms the basis for calculating DA revisions twice a year.
DA is usually revised in January and July every year to help employees manage rising prices.
Earlier this year, the government had approved a 2% increase in DA in March, raising it from 53% to 55% of the basic salary and pension. The new hike, once cleared, will add to this figure and directly improve take-home pay and pensions.
For example, an employee with a basic salary of Rs 50,000 currently gets Rs 26,500 as DA after the last hike. With the expected increase, this amount will go up further, providing some relief amid high living costs.
If the Cabinet clears the decision today, the DA hike will bring extra money in the hands of central government staff and pensioners ahead of the festive season. This is also expected to have a positive impact on consumer spending.
Source: India Today