Dearness Allowance Increased By 4%: Key Points Central Govt Employees Need To Know

The government has decided to increase Dearness Relief (DR) and Dearness Allowance (DA) by 4%, meaning that for central government employees and pensioners, the entire DA will equal 50% of their base pay.

A Press Information Bureau (PIB) announcement dated March 7, 2024 states that the total annual impact of Dearness Relief and Dearness Allowance on the exchequer will be Rs. 12,868.72 crore. About 67.95 lakh pensioners and 49.18 lakh Central government employees are going to benefit from this.

This decision also means that transport, deputation and canteen allowances will increase by 25%.

Here are six key points about the basic pay increase as per an Office Memorandum (OM) from the Ministry of Finance dated March 12, 2024:

– Central Government employees’ Dearness Allowance rates will rise from 46% to 50% of their base salary as of January 1, 2024.

– According to the office memorandum, Basic Pay in the modified pay structure refers to the pay drawn at the specified Level in the Pay Matrix in accordance with the Government-accepted recommendations of the 7th CPC. It excludes all other forms of pay, such as special pay.

– The Dearness Allowance will remain a separate part of the salary and will not be considered as pay under FR 9(21).

– The Dearness Allowance payment for amounts of 50 paise or more will be rounded up to the next whole rupee, while amounts less than 50 paise will be ignored.

– Arrears of Dearness Allowance will not be paid before the March 2024 salary disbursement date.

– The aforementioned directives are also applicable to non-military staff who receive remuneration from the Defence Services Estimates. Any associated expenses must be allocated to the respective head of the Defence Services Estimates. The Ministry of Railways and the Ministry of Defence will publish separate directives for employees of the railways and the armed forces, respectively.

The DA and DR are revised twice a year using the Consumer Price Index – Industrial Workers. The initial update, which takes effect from January 1, is generally disclosed shortly before the festival of Holi. Meanwhile, the second update, which takes effect from July 1, is usually determined prior to the celebration of Durga Puja.

DA is determined using the All-India Consumer Price Index (AICPI), which indicates how the costs of ordinary commodities fluctuate over time.