Centre likely to hike dearness allowance by 4% to 42%

New Delhi: The central government is likely to increase dearness allowance (DA) for its over one crore employees and pensioners by four percentage points to 42 per cent from existing 38 per cent as per the agreed formula for the purpose.

The dearness allowance for employees and pensioners are worked out on the basis of the latest Consumer Price Index for Industrial Workers (CPI-IW) brought out by the Labour Bureau every month. The Labour Bureau is a wing of the Labour Ministry.

Talking to PTI, All India Railwaymen Federation, General Secretary, Shiva Gopal Mishra said, "The CPI-IW for December 2022 was released on January 31, 2023. The dearness allowance hike works out to be 4.23 per cent. But the government does not factor in hiking DA beyond decimal point. Thus DA is likely to be increased by four percentage points to 42 per cent." 

He further explained that the expenditure department of the Finance Ministry will formulate a proposal to hike DA along with its revenue implication and will put up the proposal before the Union Cabinet for approval.

The DA hike will be effective from January 1, 2023.

Presently over one crore central government employees and pensioners are getting 38 per cent dearness allowance.

Last revision in DA was done on September 28, 2022, which was effective from July 1, 2022.

The Centre had increased DA by four percentage points to 38 per cent based on the percentage increase in 12 monthly average of All India Consumer Price Index for the period ending June, 2022.

The DA is provided to employees and pensioners to compensate them for rising prices. The cost of living increases over a period of time and is reflected through CPI-IW.

The allowance is revised periodically twice a year.