Karnataka raises dearness allowance to 42.5% for state govt employees

On March 7, the Union Cabinet approved a hike in dearness allowance to 50% of the basic pay for central government employees and dearness relief to pensioners.

Union Minister Piyush Goyal announced the decision, stating, "The Union Cabinet has approved the release of an additional installment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners from January 1, 2024, representing an increase of 4 percentage points over the existing rate of 46% of the basic pay/pension, to compensate against price rise."

This move is expected to benefit over a crore employees and pensioners across the country and comes as a proactive step to address the impact of rising prices on the cost of living.

The adjustment in Dearness Allowance is calculated based on the latest Consumer Price Index for Industrial Workers (CPI-IW), released monthly by the Labour Bureau, and is determined as a percentage of the basic salary.