Dearness Allowance or da : all things you need to know

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Sure! We covered the recent announcement by the Central Government of a 4% increase in Dearness Allowance (DA) for central government employees and pensioners in this blog post. Union Minister Anurag Thakur made the announcement, stating that the DA for these employees has been increased to 42%.

We explained how the DA rise will affect the incomes of central government employees and pensioners, as well as how they can calculate the increase based on their basic salary and grade. We also provided the formula for calculating the DA increase for central government employees and those working in Public Sector Units (PSUs).

Dearness Allowance Hike Calculation: Everything you need to know about the recent 4% increase in Dearness Allowance for Central Government employees and pensioners.

The long wait is now over for central government employees and pensioners, as the Central Government announced a 4% increase in Dearness Allowance on Friday. Union Minister Anurag Thakur verified the news, stating that DA for central government employees has been increased by 4% to 42%.

According to the official notification, the Cabinet has approved the payment of an additional installment of Dearness Allowance to Central Government employees and Dearness Relief to Pensioners, which is due on January 1, 2023. This will help 47.58 million employees and 69.76 million retirees.

Till now, all central government employees and pensioners were paid 38% DA and DR under the 7th Pay Commission. But, with the 4% DA increase, this figure will rise to 42%.

The increased DA will be paid along with the salary in March 2023. The dearness allowance is based only on the basic wage. For example, if a government employee's pay is Rs 20,000, a 4% DA rise improves their monthly salary by Rs 800.

[(Average of All India Consumer Price Index AICPI) for the last 12 months - 115.76)/115.76]100 is the formula used to calculate the Dearness Allowance amount for central government employees. For PSU employees, the calculation method is Dearness Allowance Percentage = [Average of Consumer Price Index for the last three months (Base Year 2001 = 100)-126.33)] x100.

The 7th Pay Commission matrix shows a significant increase in officer grade pay. Furthermore, if the basic pension is Rs 31,550, the new monthly DA will be 42% - Rs 13,251/month. Since the DA rises by 4%, the salary will rise by Rs 1262 per month.

Together with the announcement of an increase in Dearness Allowance / Dearness Relief (DR), two months' arrears will be paid. This will most certainly involve enhanced DA payments for January and February 2023. Together with the salary/pension for March 2023, an additional payment of Rs 1262 + 1262 would be made.

The combined fiscal impact of Dearness Allowance and Dearness Relief would be Rs.12,815.60 crore per year. This rise is in conformity with the established methodology, which is based on the 7th Central Pay Commission's recommendations.

The DA increase will benefit around 47.58 lakh central government employees and 69.76 lakh pensioners. The entire fiscal impact of both DA and Dearness Relief (DR) would be Rs.12,815.60 crore per year.

Finally, the announcement of a 4% increase in Dearness Allowance (DA) for central government employees and pensioners is a significant development that will benefit millions of people. The rise in DA from 38% to 42% will help to reduce the financial burden on employees and retirees, especially in light of rising inflation and cost of living.

The increase in DA will not only enhance employees' take-home pay, but it will also benefit the economy by increasing people's purchasing power. This rise in demand will, in turn, support the growth of many sectors of the economy. Furthermore, the payment of two months' arrears, along with the DA increase, would provide much-needed financial assistance to employees and pensioners.

The DA walk computation offered in this blog can help central government employees and pensioners determine their revised income and pension. It is crucial to note that the formula used to determine the DA increase is based on the 7th Central Pay Commission's recommendations and is intended to compensate for increased living costs.

Nevertheless, the news of the DA increase is a great relief for central government employees and retirees who have been anticipating this development for some time. It is a positive step towards improving people's financial well-being and ensuring that they are fairly compensated for their work.