The central government is likely to hike the dearness allowance (DA) and dearness relief (DR) for its employees and pensioners soon, according to media reports. The DA is likely to be increased by 4 percentage points to 42 per cent, they said.
The central government revises the DA and DR for employees based on a formula. Following is the formula:
Dearness Allowance Percentage = ((Average of All-India Consumer Price Index (Base Year 2001=100) for the past 12 months -115.76)/115.76)x100.
For Central public sector employees: Dearness Allowance Percentage = ((Average of All-India Consumer Price Index (Base Year 2001=100) for the past 3 months -126.33)/126.33)x100.
DA and DR are revised twice a year — January and July. Dearness allowance is given to government employees, while the dearness relief is for pensioners.
According to an ET report, the average CPI-IW of the last 12 months is 372.2 currently. Following the formula, DA is coming to 42.37 per cent. So, the Union government is likely to increase the dearness allowance to 42 per cent.
The DA hike will be effective from January 1, 2023. Currently, over one crore central government employees and pensioners are getting 38 per cent dearness allowance.
Last revision in DA was done on September 28, 2022, which was effective from July 1, 2022. The Centre had increased DA by four percentage points to 38 per cent based on the percentage increase in 12 monthly average of All India Consumer Price Index for the period ending June, 2022.
The DA is provided to employees and pensioners to compensate them for rising prices.
On the 18-month DA arrears, the Central government has clarified that it will not be “feasible” to release the 18-month dearness allowance (DA) arrears for the employees, which was stopped during the Covid-19 pandemic. The government had held back three installments of dearness allowance (DA) and dearness relief (DR) in view of the COVID-19 pandemic in 2020. Since this move, Central government employees and the pensioners have been waiting for an update on the pending arrears.
Minister of State for Finance, Pankaj Chaudhary, on Monday said in Lok Sabha that the release of the 18-month arrears of DA and DR wasn’t feasible due to the negative financial impact of the pandemic.
“As the adverse financial impact of pandemic in 2020 and the financing of welfare measures taken by Government had a fiscal spillover beyond FY 2020-21, arrears of DA/DR which mostly pertain to the difficult FY of 2020-21 are not considered feasible,” said Chaudhary.
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