Centre approves 4% hike in DA for central govt employees

The Union Government recently took a significant step to benefit Central government employees and pensioners by increasing the Dearness Allowance (DA) and Dearness Relief (DR) by 4%. This increase will be effective from July 1, 2023.

Increase in Dearness Allowance and Relief

• Union Minister Anurag Thakur announced a 4% increase in Dearness Allowance and Dearness Relief.
• The DA will go up from 42% to 46%.
• This decision benefits a large number of people, including 48.67 lakh central government employees and 67.95 lakh pensioners.

Determining Dearness Allowance

• The dearness allowance for employees and pensioners is calculated based on the Consumer Price Index for Industrial Workers (CPI-IW), published monthly by the Labour Bureau.
• The release of the additional installment of DA and DR will be applicable from July 1, 2023.

Cabinet Approval

• The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the release of this additional installment of DA and DR, aligning with the recommendations of the 7th Central Pay Commission.
• This 4% increase aims to compensate for the rising prices and inflation.

Financial Implications

• The combined impact on the government’s finances, due to both Dearness Allowance and Dearness Relief, is estimated to be Rs. 12,857 crore per year.
• This increase will directly benefit around 48.67 lakh Central Government employees and 67.95 lakh pensioners.

Diwali Bonuses and Ad-Hoc Bonuses

• Additionally, the government approved Diwali bonuses for Group C and non-gazetted Group B level officials, including paramilitary forces.
• The finance ministry set a limit of ₹7,000 for non-productivity linked bonuses (ad hoc bonuses) for central government employees for the year 2022–2023.

Bonus for Non-Productivity Linked Employees

• The Department of Expenditure, under the finance ministry, granted a non-productivity linked bonus (ad-hoc bonus) equivalent to 30 days’ emoluments for the accounting year 2022-23.
• This bonus extends to central government employees in Group ‘C’ and all non-gazetted employees in Group ‘B,’ who are not covered by any productivity-linked bonus scheme.

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