The Central Government has approved a 4% hike in Dearness Allowance (DA) for Central Government employees, effective from July 1, 2023. This hike will bring the total DA to 46%.
The DA hike was announced by Union Finance Minister Nirmala Sitharaman on September 28, 2023. The hike will benefit over 48 lakh Central Government employees and 68 lakh pensioners.
The DA hike is a welcome relief for Central Government employees, who have been grappling with high inflation in recent months. The DA hike will help to improve the financial condition of Central Government employees and pensioners.
What is Dearness Allowance (DA)?
Dearness Allowance (DA) is a type of allowance that is paid to government employees and pensioners to compensate them for the rise in the cost of living. The DA is calculated on the basis of the Consumer Price Index (CPI), which measures the changes in the prices of a basket of goods and services.
The DA is paid on a monthly basis, and it is calculated as a percentage of the basic salary of the employee or pensioner. The DA rate is revised every six months, on January 1 and July 1.
Benefits of the DA hike
The DA hike will benefit Central Government employees and pensioners in the following ways:
- It will help to improve their financial condition.
- It will help to offset the rise in the cost of living.
- It will motivate them to work harder.
- It will boost their morale.
Impact of the DA hike on the economy
The DA hike will have a positive impact on the economy. It will increase the disposable income of Central Government employees and pensioners, which will lead to increased consumption. This will boost the demand for goods and services, which will lead to economic growth.