The expected increase in Dearness Allowance is depicted in the following figure:
As per the central government’s announcement in this year, central government employees are likely to get a dearness allowance (DA) increase in 2024. After a 4% raise effective on January first, another raise will be effective on July first. According to government statistics it could be between 4% to 5% since inflation is high. This may take the DA from 50% to 55% enabling employees to afford the increasing costs of living.
Impact on Basic Pay
For instance, If the basic wages are ₹ 18000/- and the DA is @ 50% then the employees draw ₹ 9000/- as DA. Thus, with a new hike if the base salary goes up to ₹ 27,000, the DA at 4% will be ₹ 1,080. The total salary would then go to ₹28,080, signifying the aspects of the fresh DA adjustment.
Recommendations of ACC and implications for the 7th Pay Commission
The DA hike relates to the payroll under the 7th Pay Commission for employees’ salaries. Although the actual numbers contain the CPI measure, the anticipated rise will assist the employees organise their financial affairs as the economy shifts. The nominal rates of DA increase will be declared before the end of July with the increase normally from the beginning of the third quarter.
Latest Updates
The DA adjustments are scaled on the All-India Consumer Price Index (AICPI) made known to the public monthly. July 2024 data would be released on or before the last three days of that month, to corroborate the higher DA. It contains this adjustment to avail its services in preserving the purchasing power of employees in the centre.
