There will be a bumper jump in salary, Will employees and pensioners get a gift on March 26? 

Good news for government employees. The wait for a dearness allowance (DA) increase is stretching out for central employees and pensioners. There was hope that the Modi government would announce a raise in DA during the Holi Rangpanchami festival, but that didn’t happen.

Now, there’s anticipation that a proposal for a DA hike might be discussed in the cabinet meeting led by PM Narendra Modi on March 26. Following that, the Finance Ministry is expected to issue orders, although we’re still waiting for official confirmation. Last year, the DA rates were updated at the end of March.

Is a 2 to 3 percent increase in dearness allowance on the horizon?

Currently, central government employees and pensioners receive a DA rate of 53%. The next adjustment is set for January 2025, which will rely on the AICPI Index data from July to December 2024, as provided by the Ministry of Labor.

From July to December, the AICPI Index has hit 143.7, leading to a DA score of 55.99%. This suggests a potential increase of 2 to 3%, since any figure below 0.50 is rounded down, while anything above is rounded up. The new rates will take effect in January 2025, meaning arrears for January and February will also be paid out.

The dearness allowance is adjusted twice a year

The Central Government revises the DA and Dearness Relief for employees and pensioners biannually, based on the half-yearly data from the All India Consumer Price Index. These adjustments occur every January and July, with announcements typically made around March and October.

What will the salary boost be with the DA hike?

The Dearness Allowance (DA) and Dearness Relief (DR) for retirees are determined by the Consumer Price Index (CPI-IW) for Industrial Workers. For instance, if the basic salary is Rs 18,000, a 2% increase translates to an extra Rs 360 each month, which adds up to Rs 4,320 over the year. For a basic pension of Rs 9,000, the monthly increase would be Rs 180, resulting in an annual benefit of Rs 2,160. If an employee earns Rs 1,00,000, they currently receive Rs 53,000 with a 53% DA. If the DA rises to 55%, their amount will increase to Rs 55,000.