Union Cabinet clears 4% dearness allowance hike from Jan 2023

The central government has raised the dearness allowance for its over one crore central government employees and pensioners by 4 per cent, taking the total to 42 per cent from 38 per cent. Union Minister Anurag Thakur said the centre will spend ₹ 12,815 crores to fund the hike in dearness allowance, or DA.

The government gives DA to its employees and dearness relief to pensioners to compensate them for rising prices. It is calculated based on the latest consumer price index for industrial workers, or CPI-IW.

The DA hike has been applied retrospectively from January 1, 2023, the government said.

"... This will benefit about 47.58 lakh central government employees and 69.76 lakh pensioners. This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission," the government said in a statement.

The finance ministry is likely to issue the office memorandum on the DA hike soon. It is expected that the DA hike will e implemented early next week The employees are to receive the two months' arrears next week and the hiked DA with the March month's salary. 

The centre last revised DA in September 2022, effective retrospectively from July 1, 2022. That time, too, it was raised by 4 per cent to 38 per cent.

DA is revised periodically twice a year.