DA Hike: Big news for lakhs of state employees who are waiting for DA. The central government has raised the dearness allowance (DA) for its employees and the dearness relief for pensioners by 2%, bumping the DA up from 53% to 55% starting January 2025. Following this move, state governments are now gearing up to adjust their DA as well.
On April 1, the Rajasthan government announced an increase in DA for 12.5 lakh employees and pensioners. There are also expectations that the Yogi Adityanath government in Uttar Pradesh will soon follow suit, potentially raising the dearness allowance for its 12 lakh employees and 16 lakh pensioners.
So, will the dearness allowance see another increase in January 2025?
According to media reports, the Yogi Adityanath government might announce a 2% hike in dearness allowance this April, with the new rates set to take effect from January 1, 2025. This would mean that employees could receive three months’ worth of arrears. If this happens, state employees’ DA would match the central rate of 55%, up from the current 53%.
Additionally, there could be a decision regarding the annual increment for over 2 lakh employees. About 25% of state employees who typically don’t receive an increment in July may get an extra 3% raise in January, leading to an overall salary increase of around 6%. The remaining employees would see a 3% salary hike as well, though official confirmation is still pending.
Here’s how the dearness allowance is calculated:
The adjustments in DA and DR are based on the percentage change in the 12-month average of the All India Consumer Price Index (CPI-IW) for industrial workers. The government typically revises these allowances on January 1 and July 1 each year.
For central government employees, the DA is calculated as follows: DA% = [(Average of AICPI (Base Year 2001 = 100) for the last 12 months – 115.76)/115.76] x 100. For public sector employees, the calculation is: DA% = [(Average of AICPI (Base Year 2001 = 100) for the last 3 months – 126.33)/126.33] x 100.