DA Jumps to 50%! Central Govt Employees Get a Raise Just in Time

Central government employees can rejoice as the Union Cabinet approved a 4% hike in Dearness Allowance (DA), effective from January 1st, 2024. This increase brings the total DA to 50%, bringing much cheer to over 48 million employees and 68 million pensioners. They will also receive the DA arrears for January and February.

This announcement comes ahead of the upcoming Holi festival and the general elections, likely to be announced this month. Briefing the media, Union Minister Piyush Goyal said this decision will benefit nearly 49.2 million employees and 67.9 million pensioners. The hike is estimated to cost ₹ 12,868.72 crore annually.

Impact on Allowances and Benefits

Reaching the 50% DA milestone triggers an increase in several allowances as per the 7th Central Pay Commission recommendations. These include:

• House Rent Allowance (HRA)
• Children Education Allowance
• Special Allowance for Child Care
• Hostel Subsidy
• Travel Allowances (TA)
• Gratuity Ceiling
• Dress Allowance
• Daily Allowance

Employees can use the StaffCorner DA calculator to check their revised DA.

Key Highlights of Increased Allowances

• HRA rates will increase to 30%, 20%, and 10% of basic pay in X, Y, and Z cities respectively.
• Children Education Allowance and Hostel Subsidy will see a 25% rise.
• Gratuity ceiling will be increased by 25% to ₹25 lakh.
• Dress Allowance for various categories will also see a 25% hike.
• Daily Allowance reimbursement rates for hotel accommodation, travel expenses, and food bills will increase by 25% for different pay levels.

This hike in DA and allowances is a welcome step for central government employees, providing them with some much-needed financial relief in the face of rising inflation.