Union Cabinet clears 2% Dearness Allowance (DA) hike for central government employees: Report

On Friday, the Union Cabinet's decision to clear a 2% DA hike means that the government is increasing the allowance paid to its employees and pensioners by 2% of their basic salary. This increase is intended to help them cope with the rising cost of living. approved a 2% increase in central government employees' Dearness Allowance, or DA. This change will give workers a pay raises ahead of the anticipated 8th Pay Commission by raising the Dearness Allowance (DA) from 53% to 55%. The last increase, which increased DA from 50% to 53%, occurred in July 2024.

Dearness Allowance is essentially a cost-of-living adjustment. It's an allowance paid to government employees and pensioners in India to mitigate the impact of inflation. As prices of goods and services rise, the DA is increased to help employees maintain their purchasing power. The DA is calculated as a percentage of an employee's basic salary.

The government periodically revises the DA rate based on inflation, often using the All-India Consumer Price Index (AICPI) as a key indicator. The Union Cabinet's decision to clear a 2% DA hike means that the government is increasing the allowance paid to its employees and pensioners by 2% of their basic salary. This increase is intended to help them cope with the rising cost of living.