The government is expected to declare 4% increase in dearness allowance (DA) under 7th pay commission for central government employees on Thursday (March 7). The same is scheduled for Thursday's evening meeting between Cabinet and Cabinet Committee on Economic Affairs (CCEA), according to CNBC Awaaz sources.
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Following this proposed hike, the Dearness Allowance is poised to rise from the current 46% to 50%.
This move is expected to benefit the existing 50 lakh government employees and 62 lakh pensioners under the central government.
The proposal suggests implementing the increased DA from January 1, 2024, the report said.
The adjustment in DA, applicable to both employees and pensioners, is determined based on the latest Consumer Price Index for Industrial Workers (CPI-IW), released monthly by the Labour Bureau.
Earlier, the government approved Diwali bonuses for Group C and non-gazetted Group B level officials, including paramilitary forces.
For the financial year 2022–2023, the finance ministry had set ₹7,000 limit for the computation of non-productivity linked bonuses (ad hoc bonuses) for central government employees.
Notably, West Bengal Chief Minister Mamata Banerjee had declared in December 2023 that her government would implement 4% increase in DA for all state employees starting from New Year's Day.
Dearness Allowance (DA) is a cost-of-living adjustment allowance provided by the government to public sector employees and pensioners.
It is calculated as a percentage of the basic salary.
For Central Government employees: Dearness Allowance percent = ((Average of AICPI (Base Year 2001=100) for the past 12 months -115.76)/115.76) *100
AICPI stands for All India Consumer Price Index.
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