On 18th October (Wednesday), the Union Cabinet approved a 4% hike in Dearness Allowance (DA) for Central government employees and Dearness Relief for pensioners. With this, the DA/DR has been increased to 46% from the existing 42%. While briefing reporters about the decisions taken by the Union Cabinet, Information and Broadcasting Minister Anurag Thakur told media that the release of the additional instalment of dearness allowance and dearness relief will be applicable from 1st July, this year.
During the briefing, Thakur said, “Dearness Allowance for Central government employees and Dearness Relief for pensioners has been increased by 4 per cent. The DA hike will be implemented from 1, July 2023.”
The announcement comes in the festive season and is being hailed as a Diwali gift from the government. As a result of this Cabinet decision, central government employees will get increased salaries starting from November, in addition to arrears for the period between July and October.
The Union Minister Anurag Thakur stated that the decision has come during the festival season and will benefit both the central government employees and pensioners. Around 48.67 lakh Central Government Employees and 67.95 lakh pensioners will get benefit from this Cabinet decision. It would cost Rs 12,857 crore annually to the Union government.
The extra monthly income for Central government employees with a minimum basic salary of Rs 18,000 will rise from Rs 7,560 (at a 42% rate) to Rs 8,280 (at a 46% rate). Likewise, for employees with a maximum basic salary of Rs 56,900, their monthly earnings will increase from Rs 23,898 (at a 42% rate) to Rs 26,174 (at a 46% rate).
Notably, the government pays Dearness Allowance/Relief to its employees (DA) and pensioners (DR) to offset the impact of inflation. Taking inflation into account, the government revises the rates of DA and DR every six months.
This announcement comes a day after, the Union government on 17th October (Tuesday) approved ad-hoc (Non-productivity linked) bonuses for Group C and non-gazetted Group B rank central government officials, including paramilitary forces and armed forces. This is equivalent to 30 days of emoluments for the accounting year 2022-23.
In a notification, the Ministry of Finance stated, “The calculation ceiling for payment of ad-hoc bonus under these orders shall be monthly emoluments of ₹7,000/”.
To be eligible for the bonus, a government employee must have been in service as of 31st March 2023, and have worked continuously for at least six months during the fiscal year. Employees who meet these criteria will receive a pro-rata payment based on their duration of continuous service throughout the year.