Govt approves 4% hike in Dearness Allowance for govt employees at cost of Rs 12,869 crore per annum to exchequer

The Union cabinet on Thursday approved the hike of Dearness Allowance (DA) for the Central Government employees and and Dearness Relief (DR) for pensioners by 4 per cent effective from January 1, 2024, Union Minister Piyush Goyal said.

Post this hike, dearness allowance and dearness relief (DR) will touch 50 per cent as against the existing rate of 46 per cent.

Also Read: DA hiked by 4% to 50%, HRA, other components to rise: How much salary will increase for central government employees, pensioners?


"The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be Rs.12,868.72 crore per annum. This will benefit about 49.18 lakh Central Government employees and 67.95 lakh pensioners," the government said.

According to the government, this rise in DA, DR is in accordance with the accepted formula based on the recommendations of the seventh Central Pay Commission.

The central government determines the quantum of hike based on the CPI data for industrial workers. The 12-month average is at 392.83. Based on this, DA will come to 50.26 per cent of basic pay. The Labour Bureau, a wing of the Ministry of Labour, publishes the CPI-IW data every month. It may be noted that DA is for employees and DR is for pensioners. Every year, DA and DR are usually raised twice -- January and July.

The last hike came in October 2023, when DA was increased by 4 per cent to 46 per cent.