7th Pay Commission: 3% DA, DR hike approved, to benefit 49 lakh central govt employees, 64.89 lakh pensioners

In a good news ahead of Diwali, the Cabinet has cleared a 3% hike in dearness allowance (DA) for central government employees. The dearness relief for pensioners was also increased by 3%, Union Minister Ashwini Vaishnaw announced on Wednesday.

The increase in DA and DR will have a financial implication of ₹9,448 crore on the government.

This move will benefit about 49.18 lakh central government employees and 64.89 lakh pensioners.

The government increases DA and DR two times a year. Announcements are usually made in March and September. This time, the announcement was made in October. However, the hike is in effect from January and July.

The Central government employees get dearness allowance, while the pensioners are eligible for dearness relief.

The changes in DA and DR are based on the Consumer Price Index—Industrial Workers (CPI-IW). The base year is 2016.

The CPI-IW rose from 138.8 to 141.4 points from December 2023 to June 2024. Hence, the percentage of DA hike surged from 50.28% to 53.36%.

The government had increased DA to 50% from 46% effective from January 1, 2024.

With the increase in DA, deputation allowance, transport allowance, and canteen allowance were also raised by 25%. House Rent Allowance (HRA) was expanded from 27%, 19%, and 9% of basic pay to 30%, 20%, and 10%, respectively.

The gratuity benefits were hiked by 25%, with a ceiling of ₹25 lakh, up from ₹20 lakh earlier.

In a related development, Chhattisgarh Chief Minister Vishnu Deo Sai also announced a 4% hike in DA for state government employees.

DA hike in Chhattisgarh

"Chief Minister Shri @vishnudsai gave Diwali gift to the state employees. Dearness allowance increased to 50% from 46%. State employees will get the benefit of dearness allowance from October 1. Chief Minister's big announcement before the cabinet meeting- Dearness Allowance increased by 4%," the official handline of Chhattisgarh CMO said.