Why was there a delay in DA hike, when will government employees get the good news? 

The decision to raise the Dearness Allowance (DA) and Dearness Relief (DR) for central government employees and pensioners is still pending. The announcement has been pushed back by about a week. Over 1 crore government employees were hoping for a DA increase before Holi, and there were expectations of positive news during the Union Cabinet meeting on March 19, but that didn’t happen either.

According to sources from our partner, Financial Express, the government might make this announcement at any moment. The delay is reportedly due to necessary government procedures and financial approvals.

So, what exactly is DA and who qualifies for it? This allowance, which is tied to the basic salary of government employees, is adjusted twice a year. The government updates the DA to help offset the effects of inflation on both employees and pensioners.

It is applicable to current central government employees and pensioners as a cost of living adjustment, while those in the private sector typically do not receive it. Employees in public sector undertakings (PSUs) also benefit from the dearness allowance.

Typically, the government announces the DA increase for the January-June period before Holi and for the July-December period before Diwali. However, this year, the announcement for the January-June 2025 increase didn’t happen before Holi. It’s anticipated that a 2% increase is on the table, which would raise the DA from 53% to 55%. This expectation is based on the AICPI (All-India Consumer Price Index Data) for the July-December 2024 period.

So, when can we expect the decision on the DA hike?

Since the announcement has already been postponed, the government might approve it in the upcoming cabinet meeting, likely scheduled for next week. Once it’s approved, the new DA will take effect from January 2025, and employees will also receive arrears for January, February, and March when they get their April salary.

What benefits will employees and pensioners see?

For those with a basic salary of Rs 18,000, a 2% increase means an extra Rs 360 per month, totaling an additional Rs 4,320 over the year.

On the other hand, if the basic pension is Rs 9,000, the monthly increase would be Rs 180, leading to an annual benefit of Rs 2,160.

However, experts suggest that the DA hike might exceed 2% and could reach as high as 4%, especially since the RBI has updated its inflation forecast for the current fiscal year from 4.5% to 4.8%.