The central government is likely to raise dearness allowance (DA) for its over one crore employees and pensioners by four percentage points to 42 per cent from the existing 38 per cent as per the agreed formula for the purpose, news agency PTI reported on Sunday.
The dearness allowance for employees and pensioners is decided on the basis of the latest Consumer Price Index for Industrial Workers (CPI-IW) brought out by the Labour Bureau every month. The Labour Bureau is a wing of the Labour Ministry.
Speaking to PTI, Shiva Gopal Mishra, General Secretary, All India Railwaymen Federation, said, “The CPI-IW for December 2022 was released on January 31, 2023. The dearness allowance hike works out to be 4.23 per cent. But the government does not factor in hiking DA beyond decimal point. Thus, DA is likely to be increased by four percentage points to 42 per cent.”
He further explained that the expenditure department of the Finance Ministry will formulate a proposal to hike DA along with its revenue implication and will put up the proposal before the Union Cabinet for approval.
The DA hike will be effective from January 1, 2023.
The last revision in DA was done on September 28, 2022. The Centre had increased DA by four percentage points to 38 per cent based on the percentage increase in 12 monthly averages of the All India Consumer Price Index for the period ending June 2022.
Dearness Allowance is a component of the salary of government employees and pensioners that is aimed at compensating them for the increase in the cost of living as a result of inflation. The allowance is revised periodically twice a year — in January and July. However, the DA is not the same for every government employee across India. It can differ significantly based on job location, department and seniority among other things. DA is completely taxable for salaried workers.
(With PTI inputs)
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