Diwali bonanza: 4% DA hike approved for central govt employees

New Delhi: The Centre on Wednesday announced 4% hike in Dearness Allowance (DA) for central government employees.

With this increase, the DA of central govt employees & pensioners stands hiked from 42% to 46%.

The move comes as a Diwali bonanza for lakhs of central govt employees and pensioners across the country. The proposed hike in DA was due in July.

The DA hike will be effective from July 1, 2023. With government clearing the decks for fresh hike ahead of festive season, this brings cheers & smiles on faces of lakhs of govt employees.

How 4% DA hike will impact salaries

Owing to 4% DA hike, 47 lakh employees and 68 lakh pensioners will see considerable hike in salary.

Here is a look at how pay structure will get a boost after this.

For a person with minimum basic salary of Rs 18,000, he/she gets an additional Rs 7,560/- per month under 42% DA. With the allowance now revised to 46%, this amount will increase to Rs 8,280.

For a person with maximum basic salary of Rs 56,900, he/she would be earning Rs 23,898 in monthly earnings, as per under currently 42% DA. With the increased hike to 6%, their monthly income will increase by Rs 26,174.

DA calculation method

The Dearness Allowance is calculated in proportion to an employee’s basic salary. There is a set formula for this. First, a mean average of All-India Consumer Price Index (AICPI) for past 12 months is taken into account and then a percentage is applied to it.