Central government employees are eagerly anticipating the upcoming revision of the Dearness Allowance (DA), which is set for this month. Reports suggest that the official announcement might be made in the first week of March due to delays in the release of AICPI-IW data, which is crucial for determining the DA increase. The ministry has published the AICPI data for November 2024, showing a stable figure of 144.5 points, indicating a potential DA increase of 3%. This could raise the DA/DR rate to 56% starting January 2025. Let’s explore this further.
Potential DA Increase of Up to 3%
However, the government is holding off on finalizing the DA increase until the Consumer Price Index of Industrial Workers (CPI-IW) data for December is available. The inflation rate saw a rise to 3.88% in November 2024, up from 4.98% in November 2023. This suggests a possible DA increase of either 2% or 3% under the 7th Pay Commission.
Reports indicate that if the December 2024 index shifts by 0.5 points, the DA rate will reach 56%. Conversely, if it drops by 0.6 points or more, it could decrease to 55%. It’s important to note that the central government revises the DA for its employees and the Dearness Relief (DR) for pensioners twice a year, once for the January-June period and again for the July-December period.
When was the last DA increase?
In October 2024, the government announced a 3% DA increase for the July-December period, bringing the total DA to 53%. Typically, the DA hike is announced with a two-month delay, meaning employees and pensioners receive two months’ arrears along with their March or September salary or pension.
