The Government of India, under the leadership of Prime Minister Narendra Modi, has announced a 3% hike in Dearness Allowance (DA) for government employees and Dearness Relief (DR) for pensioners. The decision, made during a cabinet meeting on October 16, 2024, will take effect from July 1, 2024, benefiting over one crore government employees and pensioners. This hike aims to address the impact of inflation and ensure financial stability for government personnel.
DA Hike 2024: Overview
| Aspect | Details |
|---|---|
| Announcement Date | October 16, 2024 |
| Effective Date | July 1, 2024 |
| Hike Percentage | 3% |
| Current DA Percentage | 53% of basic pay |
| Beneficiaries | Over 1 crore employees & pensioners |
| Budget Allocated | ₹9448 crore |
| Reason for Hike | Counteract inflation, ensure financial stability |
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Impact on Pensioners
Pensioners, like active government employees, will also benefit from the 3% hike in DR. For pensioners, this increase provides much-needed relief against rising living costs. The Dearness Relief (DR) for pensioners is revised twice a year, similar to DA for employees, with adjustments in January and July. After the latest increment, pensioners will receive DR at 53% of their basic pension.
Salary Increment: Example Calculation
To understand the financial impact of the DA hike, consider the following example:
- Basic Pay: ₹18,000
- Current DA (50%): ₹9,000
- New DA (53%): ₹9,540
- Increase in DA: ₹540/month
Employees with higher basic pay will see a proportional increase in their DA, providing a substantial financial boost to those in higher pay bands.
How is DA Calculated?
The calculation of DA relies on the All India Consumer Price Index (AICPI), which tracks the cost of living. The formula to compute DA is:
- DA% = ((Average of AICPI (Base Year 2001=100) for the past 12 months – 115.76) / 115.76) × 100
The government reviews and revises DA every six months to align with inflation trends.
Budgetary Impact
The government has allocated a budget of ₹9448 crores to accommodate the financial implications of this hike. This investment reflects the government’s commitment to countering inflation and supporting its employees and retirees.
Key Takeaways
- Hike Percentage: DA and DR both increased by 3%, effective from July 1, 2024.
- Current DA/DR: Now at 53% of basic pay or pension.
- Beneficiaries: Over one crore government employees and pensioners.
- Objective: Provide financial relief amidst rising living costs.
Frequently Asked Questions (FAQs)
1. What is the effective date of the DA hike?
The 3% DA hike will be effective from July 1, 2024. Employees and pensioners will receive arrears starting from this date.
2. How often is DA revised?
The government revises DA twice a year, typically in January and July, to align with inflation and the AICPI index.
This DA hike demonstrates the government’s commitment to supporting its workforce and pensioners by mitigating the financial pressures caused by inflation. Stay updated on further announcements through the official government website and notifications.