Early Diwali Gift for Central Government Employees: 3% DA and DR Hike Approved

Central government employees and pensioners have received an early Diwali gift in 2024, as the Union Cabinet led by Prime Minister Narendra Modi has approved the much-anticipated hike in Dearness Allowance (DA) and Dearness Relief (DR). The Cabinet has announced a 3% increase in both DA for employees and DR for pensioners.

DA and DR Increased by 3%

This new 3% hike will be effective from July 1, 2024. The DA/DR is revised twice a year by the central government, usually in January and July, to help employees and pensioners cope with inflation and rising costs of living. This time, the increase brings much-needed financial relief as it adjusts their basic pay and pensions to account for the higher cost of living.

Dearness Allowance vs. Dearness Relief

While serving central government employees are entitled to DA, pensioners receive Dearness Relief (DR). Both allowances are meant to safeguard against the erosion of purchasing power due to inflation. These payments ensure that the real value of an employee’s salary or pension is maintained over time, even as living expenses increase.

Financial Impact of the Hike

The financial implication of this 3% hike is estimated at ₹9,448 crore. This comes after the last DA adjustment, which saw a 4% increase in March 2024, effective from January. With this new hike, central government employees will now receive DA amounting to 50% of their basic salary, while pensioners will be eligible for DR amounting to 50% of their basic pension.

Conclusion

The timely announcement of this DA and DR hike will bring immediate financial relief to over a million central government employees and pensioners. The government’s decision to implement the increase ahead of Diwali 2024 showcases its commitment to addressing the needs of its workforce and retirees, helping them better manage the rising cost of living.