Government Approves Dearness Allowance Hike and Other Benefits for Employees and Pensioners

The Union Cabinet has sanctioned a 4% increase in Dearness Allowance (DA) and Dearness Relief (DR) for central government employees and pensioners, effective from January 1. This decision aims to benefit over 10 million employees and 6.79 million pensioners, with a combined impact on the exchequer of Rs 12,869 crore annually.

Key Points

1. Dearness Allowance Hike:

• The Union Cabinet has approved a 4% increase in Dearness Allowance (DA) and Dearness Relief (DR).
• The DA and DR will rise from 46% to 50% of the basic pay/pension, effective from January 1, 2024.
• This hike will result in an additional expenditure of Rs 12,869 crore annually.

2. Arrears and Effective Date:

• The enhanced DA of 50% of basic pay will be effective from January 1, 2024.
• Central Government Employees and pensioners will receive arrears, if applicable.

3. Increase in Allowances:

• Transport allowance, canteen allowance, and deputation allowance will see a 25% increase.
• House Rent Allowance (HRA) has been raised for various categories, with percentages rising to 30%, 20%, and 10% respectively.

4. Gratuity Benefits:

• Gratuity benefits have been raised by 25%, with the ceiling increased to Rs 25 lakh from the existing Rs 20 lakh.

5. Beneficiaries:

• Approximately 49.18 lakh employees and 67.95 lakh pensioners will benefit from these revisions.

6. Exchequer Impact:

• The combined impact on the exchequer, including both Dearness Allowance and Dearness Relief, would be Rs 12,869 crore per annum.
• For the fiscal year 2024-25 (January 2024 to February 2025), the impact is estimated to be Rs 15,014 crore.