DA Hike: Good News for Govt Employees, New Year Gift
DA Hike: Reports suggest that the Central government will hike Dearness Allowance by 4 per cent for the six-month period starting January 1, 2024.
Dearness Allowance (DA Hike): Good news for government employees. The Central government will increase the gratuity. Along with this, there will be an increase in the salary of central government employees. Media reports say that the gratuity for pensioners will also increase.
Reports say that the Central government will increase DA by 4 per cent for a period of six months starting January 1, 2024. It is known that the announcement could be made in March 2024. The latest AICPI (All India Consumer Price Index) has reached 139.1 percent.
This indicates an increase in prices. Along with this, the analysis suggests that the dearness allowance of central government employees may be increased in line with AICPI. Last October too, the government had increased the DA. With effect from July 1, 2023, the bereavement allowance has been increased by 4 per cent, taking it to 46 per cent. If this is further increased by 4%, the total DA will reach 50%.
Dearness Allowance is an amount given to employees as part of their salary in line with the rise in prices in the economy. Even when inflation increases, the value of the currency decreases. This damages the purchasing power of employees. That is why DA is increased to compensate for this. Gratuity is the amount paid to the pensioner.
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The increase in DR increases the pensioner’s monthly pension. DA is given as percentage of basic pay and DR as percentage of pensionable amount. The Central Government revises these allowances with effect from 1st January and 1st July every year. But its decisions are usually announced in March and September.
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The Center revised the formula to calculate DA and DR. The DA hike is calculated based on the percentage increase in the All India Consumer Price Index (AICPI) for the period ended June last year. About 48.67 lakh central government employees and 67.95 lakh pensioners will benefit from the decision to increase the central DA. Both DA and DR have an impact of Rs 12,857 crore on the exchequer every year. Gratuity is a part of an employee’s salary. Hence tax is applicable on it as per slab rate.
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