Cabinet hikes DA BY 4% Pre-Holi, Pre-Election Pay Bonanza

New Delhi, March 7, 2024: In welcome news for central government employees, the Union Cabinet today approved a 4% hike in Dearness Allowance (DA), effective from January 1st, 2024. The employees will receive the DA arrears for January and February. This increase comes earlier than previous DA announcements, bringing much cheer to the over 48 million employees and 68 million pensioners just before the Holi festival and the upcoming general elections. With this the total DA stands at 50%.

The decision comes ahead of Lok Sabha elections which are likely to be announced by the middle of this month.

Briefing the media about the cabinet decisions, Union Commerce and Industry Minister Piyush Goyal said 49.18 lakh employees and 67.95 lakh pensioners will benefit from the government decision.

He said the decision would cost ₹ 12,868.72 crore per annum to the exchequer.

The cabinet meeting was chaired by Prime Minister Narendra Modi.

The DA hike, along with the potential increase in allowances like House Rent Allowance (HRA) linked to DA revisions, translates to a significant boost in take-home pay for central government staff. This decision is expected to benefit a large voter base and comes ahead of the crucial Lok Sabha elections, scheduled to be announced soon.

"This announcement is a welcome step towards recognizing the valuable contributions of our central government employees," said a spokesperson for the Confederation of Central Government Employees. "The early announcement and timing, just before Holi and the elections, will definitely be appreciated by our members."

The DA hike is based on the Consumer Price Index (CPI) for Industrial Workers, which reflects inflation impacting the working class. The government typically revises DA twice a year, in January and July. This latest increase brings the total DA to 50% of the basic salary, further improving the financial standing of central government employees.

Furthermore, unions are pushing for the constitution of the 8th Pay Commission, which would recommend revisions to salaries, allowances, and pensions for central government employees. The 7th Pay Commission recommendations are currently in effect, and unions believe a new commission is necessary to address rising inflation and improve overall compensation.

The government has previously stated that releasing the 18-month DA arrears is not financially feasible due to the pandemic's impact. Additionally, while the 8th Pay Commission isn't currently under consideration, it remains a point of discussion and may be addressed in the future.

Despite the mixed feelings, the DA hike is a significant gain for central government employees. However, unions are likely to continue their pressure for the release of DA arrears and the establishment of the 8th Pay Commission, striving for a more comprehensive solution to their concerns.