The Union Cabinet on Friday approved a 2% increase in dearness allowance (DA) for central government employees. With this increase, the dearness allowance for central government employees will increase from 53% to 55%. The aim of this increase is to help reduce inflation and improve the salary of employees before the 8th Pay Commission.
Union Cabinet Approves 2% DA Hike for Central Employees
Under the Seventh Finance Commission, dearness allowance is increased twice a year for central employees, which is done on a half-yearly basis. If the basic salary of a central employee is Rs 50 thousand, then before the increase in dearness allowance, the dearness allowance was Rs 26,500. At the same time, now it will increase to Rs 27,500. That is, the salary of a central employee with a basic salary of 50 thousand will increase by Rs 1000.
The new increase of 2 percent for central employees will be considered effective from January 1, 2025. This means that the central employees will be given dearness allowance for the months of January and February along with March by adding them to their salary.
Recently, the government has also constituted the Eighth Pay Commission. The recommendations of the new Pay Commission are expected to be implemented from January, the first month of next year i.e. 2026.
What is Dearness Allowance?
Dearness Allowance (DA) is a financial benefit given to government employees to compensate for inflation and ensure that their salary remains in line with the rising cost of living. While the basic salary is determined by the Pay Commission every 10 years. Dearness Allowance ensures periodic adjustments to help employees manage inflation.
Pensioners also get the benefit of this, as the application of DA on their pension provides financial assistance in old age. However, there is another aspect of this that the increase in DA puts additional burden on the government treasury, which may affect the financial management of the government.
