Cabinet Approves 4% Increase in DA
On March 7, the Union Cabinet convened in New Delhi and made the decision to provide Central government employees with an additional installment of Dearness Allowance (DA) and pensioners with Dearness Relief (DR) starting from January 1, 2024. The government stated that this increase, which amounts to four percentage points above the current rate of 46% of the basic pay/pension, aims to offset the impact of rising prices.
Furthermore, various other allowances such as house rent allowance, canteen allowance, and deputation allowance will also be subsequently increased. Following the meeting, Union Minister Piyush Goyal addressed reporters and revealed that the combined impact on the exchequer due to both DA and DR would be ₹12,868.72 crore per annum. He further stated that approximately 49.18 lakh Central government employees and 67.95 lakh pensioners would benefit from this decision. Mr. Goyal emphasized that this increase aligns with the accepted formula based on the recommendations of the seventh Central Pay Commission. In anticipation of the General Election, major unions representing Central government employees have announced an indefinite strike to demand the implementation of the old pension scheme.
Employees have also organized rallies urging the government to address issues related to promotions, pensions, and salaries. During this financial year, the Centre will allocate ₹15,014 crore for the payment of additional DA. Additionally, Mr. Goyal announced a 25% increase in transport allowance, canteen allowance, and deputation allowance. House rent allowance has also been raised from 27%, 19%, and 9% of the basic pay to 30%, 20%, and 10% respectively. Moreover, benefits under gratuity will see a 25% increase, with the ceiling raised from ₹20 lakh to ₹25 lakh. To facilitate these changes, the Centre may need to allocate ₹9,400 crore annually.
