The Union Cabinet has approved a 3% increase in Dearness Allowance (DA) for central government employees, bringing the total to 53%, as reported by NDTV on October 16. This timely adjustment is expected to benefit over one crore central government employees and pensioners. In addition to the salary increase, employees may also receive arrears, providing extra financial support during the festive season. This decision aims to ease the burden of rising living costs and is a welcome boost ahead of Diwali celebrations.
Dearness Allowance (DA) is a crucial component of central government employees’ compensation, aimed at offsetting the impact of inflation on living expenses. Calculated as a percentage of basic salary, DA is revised biannually to align with changes in the cost of living index.
The All India Consumer Price Index (AICPI) serves as the benchmark for determining DA, tracking retail price fluctuations across the country. When DA increases, it enhances employees’ take-home pay, providing essential relief amid rising inflation. This adjustment is particularly significant for households facing the ongoing challenges of increased living costs, making DA a vital aspect of government compensation packages.