BIG Relief: DA Hike Announced To The Central Government Employees

Today, the Union Cabinet announced a 4% increase in dearness allowance (DA) for central government employees. Following this hike, the DA and dearness relief (DR) will rise from 46% to 50%. This increase will be effective from January 1 of this year, and eligible central government employees and pensioners will receive any applicable arrears.

Union Minister Piyush Goyal stated after the Cabinet meeting that the government approved the release of an additional installment of DA to central government employees and DR to pensioners from January 1, 2024. This represents a 4-percentage-point increase over the existing rate of 46% of the basic pay/pension, aimed at offsetting the impact of rising prices.

In addition to the DA hike, there will be a 25% increase in transport allowance, canteen allowance, and deputation allowance. House Rent Allowance (HRA) has also been raised for various categories, from 27% to 30%, from 19% to 20%, and from 9% of basic pay to 10%.

Additionally, gratuity benefits have been elevated by 25%, with the maximum limit raised to Rs 25 lakh from the previous Rs 20 lakh.

This hike is expected to benefit approximately 49.18 lakh employees and 67.95 lakh pensioners.

The cumulative impact on the exchequer due to both Dearness Allowance and Dearness Relief is projected to be Rs 12,869 crore annually. For the fiscal year 2024-25 (from January 2024 to February 2025), the impact is estimated to be Rs 15,014 crore.