Government employees and pensioners might soon have reason to celebrate. The Narendra Modi government is expected to announce a significant increase in the Dearness Allowance (DA) and Dearness Relief (DR) in early September 2024. Here’s what you need to know about this anticipated update.
Anticipated DA Increase
Central government employees have been eagerly awaiting a DA hike for the July-September quarter. According to recent reports, the announcement for this increase could come in the first week of September.
The DA was last increased by 4% in March 2024, effective from January 2024, bringing the DA to 50% of the basic salary. There were speculations that the government might merge DA with the basic salary and restart it at 0%. However, recent indications suggest that no such merger is planned at this time.
Historical Context of DA Mergers
Historically, the merging of DA with the basic salary has been a topic of discussion. The 5th Pay Commission recommended merging DA with the basic salary whenever it reached 50% of the base index.
For instance, in February 2004, DA was merged with the basic salary and then reset to 0%. The 6th Pay Commission, however, recommended against such mergers even when DA exceeded 50% of the basic salary.
Expected DA/DR Increase for September 2024
Experts predict that the government might announce a 3% increase in DA for employees and DR for pensioners. This increase will be based on the All India Consumer Price Index (AICPI), which tracks retail price changes across various sectors. The calculation of DA is based on the average AICPI of the last 12 months for central government employees and the last 3 months for public sector employees.