DA, DR hikes likely coming in March

DA, DR hikes likely coming in March

The govt is likely to hike the dearness allowance (DA) for central employees by 4 per cent in March, reports said. Post this hike, dearness allowance and dearness relief (DR) will go up to over 50 per cent.

The central govt determines the quantum of hike based on the CPI data for industrial workers. The 12-month average is at 392.83. Based on this, DA will come to 50.26 per cent of basic pay.

The Labour Bureau, a wing of the Ministry of Labour, publishes the CPI-IW data every month.

It may be noted that DA is for employees and DR is for pensioners. Every year, DA and DR are usually raised twice — January and July.

The last hike came in October 2023, when DA was increased by 4 per cent to 46 per cent. On the basis of current inflation figures, the next DA hike is likely to be 4 per cent.

The coming hikes will apply with retrospective effect from January 1, 2024. Therefore, employees and pensioners will also get arrears for previous months.

The formula for calculating DA and DR is as follows:

7th CPC DA% = [{12 month average of AICPI-IW (Base Year 2001=100) for the last 12 months – 261.42}/261.42×100]

It may be noted here that this calculation formula is applicable to those central government workers and pensioners who get salaries based on 7th Pay Commission’s recommendations.

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