Release an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 01.07.2023 representing an increase of 4% over the existing rate of 42% of the Basic Pay/Pension

DA Increase 4% to Central Government employees and pensioners from 01.07.2023

Existing DA 42% + Additional DA 4% = Increase in DA 46%

Cabinet approves release of an additional instalment of Dearness Allowance and Dearness Relief due from 01.07.2023

48.67 lakh Central Government Employees and 67.95 lakh pensioners to benefit

Posted On: 18 OCT 2023 3:24PM by PIB Delhi

The Union Cabinet, chaired by the Prime Minister, Shri Narendra Modi has approved to release an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 01.07.2023 representing an increase of 4% over the existing rate of 42% of the Basic Pay/Pension, to compensate against price rise. This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission.

4% DA Hike to Central Government Employees – Today Latest News – DA Hike Calculation

The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be Rs.12,857 crore per annum. This will benefit about 48.67 lakh Central Government employees and 67.95 lakh pensioners.

PIB

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Government of India
Ministry of Finance
Department of Expenditure

Rajya Sabha
Unstarred Question No. 1477
To be answered on Tuesday, 15th March, 2022
Phalguna 18, 1943 (Saka)

Static DA/DR

1477: Shri Naranbhai J. Rathwa:
Will the Minister of Finance be pleased to state:

(a) whether it is a fact that India’s retail inflation including food inflation is increasing for the past one year;

(b) If so, what are the reasons that Dearness Allowance (DA) and Dearness Relief (DR) of Central Government employees have remained static at 3 percent increase;

(c) whether the inflation rate of the last two quarters of 2021 have shown an increase in prices of various commodities; and

(d) if so, whether Government would consider giving DA/DR in accordance with the prices and would not maintain DA/DR at static 3 percent?

Answer

Minister of State in the Ministry of Finance (Shri Pankaj Chaudhary)

(a) Yes Sir, details of retail inflation rate and food inflation are given in Annexure-I ;

(b) Dearness Allowance(DA) and Dearness Relief (DR), to Central Government employees and pensioners respectively, is calculated on the basis of the rate of inflation as per All India Consumer Price Index for Industrial Workers (AICPl-IW), released by Labour Bureau, M/o of Labour and Employment;

(c) The information in respect of retail inflation rate for the last two quarters of 2021 is:

(d) Does not arise in view of (b) above.

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Revision of Rate of Dearness Allowance (DA) due from 01.07.2021- Enhanced 3% DA from 28% to 31% DA: DoE OM

No. 1/4/2021-E-II (B)
Government of India
Ministry of Finance
Department of Expenditure

North Block, New Delhi
Dated the 25th October, 2021.

OFFICE MEMORANDUM

Subject: Revision of Rate of Dearness Allowance (DA) to Central Government Employees due from 01.07.2021

The undersigned is directed to refer to this Ministry’s Office Memorandum No. 1/1/2020-E-II (B) dated 20th July, 2021 on the subject mentioned above and to say that the President is pleased to decide that the Dearness Allowance payable to Central Government employees shall be enhanced from the existing rate of 28% to 31% of the Basic Pay with effect from 1st July, 2021.

2. The term ‘Basic Pay’ in the revised pay structure means the pay drawn in the prescribed Level in the Pay Matrix as per 7th CPC recommendations accepted by the Government, but does not include any other type of pay like special pay, etc.
3. The Dearness Allowance will continue to be a distinct element of remuneration and will not be treated as pay within the ambit of FR 9(21).
4. The payment on account of Dearness Allowance involving fractions of 50 paise and above may be rounded to the next higher rupee and the fractions of less than 50 paise may be ignored.
5. These orders shall also apply to the civilian employees paid from the Defence Services Estimates and the expenditure will be chargeable to the relevant head of the Defence Services Estimates. In respect of Armed Forces personnel and Railway employees, separate orders will be issued by the Ministry of Defence and Ministry of Railways, respectively
6. In their application to the persons belonging to Indian Audit and Accounts Department, these orders are issued under Article 148(5) of the Constitution and after consultation with the Comptroller and Auditor General of India.

(Nirmala Dev)
Director

To
All Ministries / Departments of the Government of India (as per standard distribution list). Copy to: C&AG, UPSC, etc. as per standard endorsement list.

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Time Interval for revision of dearness allowance:

Endeavour shall be made so that the cost of living allowance and the cash value of the concession in respect of essential commodities at concession rate shall be computed once before 1st April and 1st October in every year to revise the dearness allowance payable to the employees on the minimum wages.

Also read: 5 Percent DA July 2019 Hike Order – Grant of Dearness Allowance to Central Government employees

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Two Point increase in CPI (IW) provides scope for 6% likely increase in DA payable to Central Government Employees and Pensioners from July 2015

Rewind Central Government Employees DA from July 2015 will be 119% – All India Consumer Price Index (Industrial Workers) for May 2015 released by Labour Bureau – Two Point increase in AIPCI(IW)

DA from July 2015 – As estimated in our article on 30th May 2015, Dearness Allowance for Central Government Employees with effect from July 2015 will be increased by 6% thanks to two point increase in All India CPI (IW) for May 2015.

Except CPI for June-2015, all data for calculation of Dearness Allowance from July 2015 are available now.

We have to take the assumed value for CPI-IW only for June 2015. It is found that even for increase of 6 points in June 2015 from the existing CPI of 258, DA from July 2015 will be 119%. Only when CPI is increased to 265 from the existing level of 258, DA from July 2015 will be increased to 120%.

On the lower side, we found that only when Consumer Price Index fell down to 250 i.e when CPI (IW) is getting decreased by 8 Points, Central Government Employees DA from July 2015 will be fixed at 118%.

From the above, it is clear that chances for decrease of 8 Points in CPI in a single month  or increase of 7 points in same period are very remote. So, we can very well conclude that DA from July 2015 will be 119%.

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Since the implementation of 6CPC from 1-1-2006, the consumer price index number for industrial worker is not coming down ever but it is increasing month by month. Similarly the rate of dearness allowance paid to central government employees also increasing at the interval of every six months period. The rate of dearness allowance was at zero level on 01-01-2006. After six years from implementation of 6CPC, now the dearness allowance stands at 80% level. The average increase in the dearness allowance is at the rate of 13% per year. Actually there is nothing to rejoice over the increase of dearness allowance. The Dearness allowance is nothing but the reflection of consumer price index.

Likewise the consumer price index is determined by increase in the prices of basket of identified essential commodities. The increase of CPI number is not good any way for either the government employees or common people. Whatever the money the central government employees are supposed to get from the dearness allowance hike will be swallowed by the essential commodities for which they have to spend every month, since the prices of all the essential commodities are increasing at the alarming rate.

The formula for calculating dearness allowance is:

( Avg of AICPI for the past 12 months – 115.76)*100/115.76

If we apply this in the formula given above the answer is = 90.120

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