November 4, 2024

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Government Set to Announce DA Hike Soon, Date Revealed

The central government is preparing to announce a Dearness Allowance (DA) hike for its employees, with the formal declaration expected on October 25, 2024. The DA is likely to increase by 4-5 percentage points, bringing relief to millions of central government employees and pensioners. This hike comes as part of the biannual adjustments to help offset inflation, with the current DA rate set to rise from 42% to 46-47%. The hike is anticipated to cost the government an additional ₹12,000 crore annually, but will provide much-needed financial relief amid rising living costs.
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The central government is set to announce the much-anticipated hike in Dearness Allowance (DA) for its employees. According to reliable sources, the formal declaration is expected to be made on October 25, 2024, bringing relief to nearly 11 million central government employees and pensioners.

The hike, which is aimed at offsetting the impact of inflation on salaries, is expected to increase the DA by 4-5 percentage points. Currently, employees receive 42% of their basic pay as DA. The upcoming revision could push this figure to 46-47%, depending on the inflation rates calculated from the All India Consumer Price Index (AICPI).

The DA hike is a biannual exercise, usually occurring in March and September, in line with rising living costs. The government’s move will not only benefit working employees but also pensioners, as the same increase in Dearness Relief (DR) will be extended to them.

Economic Implications

While the hike brings financial relief to employees, it also places a considerable fiscal burden on the exchequer. With inflation rates remaining elevated, experts estimate that this increase could cost the government an additional ₹12,000 crore annually.

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Despite the cost, the DA hike is viewed as crucial to maintaining the purchasing power of government employees amid rising prices of essential commodities. This decision comes ahead of the festive season, providing an extra financial boost for employees ahead of Diwali.

Previous Hikes and Impact

Earlier this year, the government had raised the DA from 38% to 42% in March 2024, following the same pattern of biannual increases. Historically, DA hikes have had a positive impact on market sentiment as they tend to drive consumer spending in the months following the announcement, particularly during major festive seasons.

Union representatives have welcomed the upcoming hike but continue to push for a more comprehensive overhaul of salary structures to cope with long-term inflation trends.

For now, the official announcement on October 25 will confirm the exact percentage increase and implementation date, marking another step in the government’s efforts to support its workforce in challenging economic times.

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