Big news for Govt employees! DA raised to 50%

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The central government employees and pensioners have been given a a 4% hike in dearness allowance/dearness relief DA/DR), effective January 1, 2024. The total DA/DR now stands raised to 50%. The move will benefit over 1 crore employees and pensioners ahead of general elections.

“The Union Cabinet approved the release an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners from January 1, 2024, representing an increase of 4 percentage points over the existing rate of 46 per cent of the basic pay/pension, to compensate against price rise,” Union Minister Piyush Goyal said after the Cabinet meeting.

The central government staff and pensioners get this DA hike every six months in January and July.

The financial impact on government would be Rs 12,869 crore per annum. For 2024-25 (January 2024 to February 2025), the impact would be Rs 15,014 crore. As the DA now has touched 50%, the transport allowance, canteen allowance, and deputation allowance among others have been increased by 25 per cent. House Rent Allowance has been raised from 27 per cent, 19 per cent and 9 per cent of basic pay to 30 per cent, 20 per cent and 10 per cent, respectively for X, Y and Z cities.

Benefits under gratuity have been increased by 25 per cent with an increase ceiling of Rs 25 lakh from the existing Rs 20 lakh. The burden on the exchequer due to an increase in various allowances would be Rs 9,400 crore annually.