Good news is going to be received for central employees in the new year. A noticeable increase in the dearness allowance is on the horizon. There are discussions suggesting that another significant rise in the dearness allowance may occur soon. Based on the AICPI index data, the expected DA increase for employees is projected to be around 3 percent. Current trends indicate that the Dearness Allowance (for January 2025) could reach 56 percent. Let’s break down how this is calculated. The AICPI Index figures are available up to October, and projections for November and December also suggest a 3 percent increase in DA.
AICPI Overview
The AICPI index monitors inflation and changes in commodity prices across the country. So far, the data for July, August, September, and October 2024 has been released for this half-year. In July, the index stood at 142.7 points, resulting in a dearness allowance of 53.64 percent. In August, the index dipped slightly to 142.6 points, leading to a DA of 53.95%. By September, the index rose to 143.3 points, pushing the allowance to 54.49%. The latest data for October shows the index at 144.5 points, which translates to a dearness allowance of 55.05%. Currently, the dearness allowance is set at 53 percent, effective from July 2024.
New DA Effective January 1
The central government updates the DA every six months. Following a 3% increase in July 2024, another 3% rise is anticipated for January 2025. This adjustment will benefit over 10 million employees and pensioners. The new dearness allowance for central employees is expected to take effect in January 2025, with an official announcement likely in March 2025, typically around the Holi festival.
What to Expect for November-December?
As of October, the index is at 144.5 points, resulting in a dearness allowance of 55.05%. Looking ahead to the next two months, the index is projected to reach 145 points in November, which would increase the inflation allowance to 55.59%. Additionally, estimates for the index number are being calculated.
What will the salary increase be?
Based on the pay scale of the 7th Pay Commission, employees earning the minimum basic salary will see an annual increase of Rs 6,480. For instance, if the basic salary is Rs 18,000 and the dearness allowance is set at 56%, the calculations would look like this:
DA from January 2025: Rs 18,000 x 56% = Rs 10,080/month
DA from July 2024: Rs 18,000 x 53% = Rs 9,540/month
The difference with a 3% increase amounts to Rs 540 per month.
