The attention of all is on the central government, because employees and pensioners are expecting how much Dearness Allowance (DA) will change, which it will announce today. Rumors state that the government may declare an increase in DA tomorrow, Wednesday, March 5.
And if announcements have been the trend from previous habits, people would probably receive this announcement just before the Holi festival, bringing joy to millions. The effect of this would be post the cabinet meeting, and in the coming time, it will mark yet another step in the significant increase in income for central government employees and pensioners.
Will DA Increase by 3% or 4%?
According to sources, the government is likely to announce an increase of 3% in DA. This will directly impact the salaries of central government employees right from an entry-level staff to the highest officials. For example, an employee with a basic monthly salary of ₹18,000 would get an increase of ₹540 per month as a result of this announcement. On the contrary, if this time the announcement is made at 4%, the amount of increase can be extended to even ₹720 per month, thereby providing added financial relief.
How is Dearness Allowance Calculated?
Let us see an example for this.
An employee gets a total salary of 30,000, out of which basic pay (taking an example) is 18,000. So, if DA at 50% is invoked, then the employee would be getting ₹9,000 as DA. In case of a 3% hike, it would become ₹9540 as DA, thereby increasing the total salary by ₹540. In the event of a 4% hike, it would jump to ₹9720, giving a boost of ₹720 monthly earnings.
What Was the Last Year’s DA Increase?
Now, to DA which was earlier 46% was increased by 4% in March 2024 by the Government. The Central Government again announced an additional 3% increase in DA in October 2024, thus bringing DA to a total of 53%. Now, there is to be a further hike in DA expected to be about 3%-4% effective from January 1, 2025. You never know when the announcement may come; however, it will be effective from the beginning of the year.
Who Will Benefit from the DA Hike?
It will benefit more than 1 crore employees and pensioners of the Central Government. Under the provisions of the 7th Pay Commission, the pensioner’s DA and Dearness Relief (DR) are revised every year in January and July. Not only are there provisions for salary increases, but they also give great help to the families in terms of finances, usually during early festive seasons like Holi.