DA Hike: Central DA increased by 3%, state govt's DA hike range from 4% to 9%. Check latest details

DA hike: Central government employees on Wednesday finally got a festive boost after the Centre decided to give away a 3% hike in Dearness Allowance (DA), effective July 1, 2024. In March, after a 4% increase, the DA was at 50% of basic pay. After a 3% hike on October 16, 2024, the DA will be now at 53% of basic pay. 

The Dearness Allowance (DA) is an essential part of the remuneration package for more than one crore central government workers and retirees, is structured to protect them from the impact of inflation. Utilising the Consumer Price Index (CPI) as a benchmark, the DA guarantees that employees' wages are adjusted to match the increased cost of living, thereby ensuring their purchasing power remains unaffected by economic fluctuations.

Impact of 3% DA Hike

To comprehend the implications of the recent 3% Dearness Allowance (DA) increase, let us examine a hypothetical scenario: If a central government employee currently has a basic pay of Rs 46,200, their previous DA at 50% amounted to Rs 23,100. Following the adjustment to a 53% DA, their new allowance will rise to Rs 24,486. This signifies an additional Rs 1,386 (Rs 24,486 - Rs 23,100) in DA that they will receive from October onwards. Additionally, as the DA revision is retroactively implemented from July 1, 2024, they will also be entitled to arrears for the preceding three months -- July, August, and September.

3% DR Hike 

The dearness relief (DR) for central government pensioners has also been increased by 3%, reaching a total of 53%. This adjustment will lead to a higher monthly pension for these pensioners, effective from October 2024. To illustrate the impact of this increase, consider the following scenario: a central government pensioner currently receiving a basic pension of Rs 50,400 per month was previously receiving Rs 25,200 as dearness relief at the previous 50% rate. With the dearness relief now at 53%, their monthly dearness relief will rise to Rs 26,712, resulting in a monthly pension increase of Rs 1,512.

State DA hike

Several states have recently announced hikes in dearness allowance (DA) for their government employees. Chhattisgarh CM Vishnu Deo Sai on October 17 raised the DA for state government employees by 4%, bringing the total DA to 50%. Similarly, the Odisha government has approved a 4% increase in DA for workers of State Public Sector Undertakings (PSUs), elevating the DA from 46% to 50%, effective from January 1, 2024.

In Himachal Pradesh, CM Sukhvinder Singh Sukhu has declared a 4% increment in dearness allowance for state government employees and pensioners, starting from January 1, 2023. Additionally, he announced the immediate settlement of outstanding medical bills of government workers and pension arrears for individuals over 75 years old. Class-IV employees will also receive a Rs 20,000 installment of their arrears as part of the increased DA.

The government of Sikkim announced a 4% increase in DA for its employees ahead of the Durga Puja festival. Effective January 1, 2024, the dearness allowance of 46% was raised to 50% for state government staff. This adjustment will also apply to the dearness relief provided to pensioners.

Likewise, the Jharkhand state government has approved a 9% hike in dearness allowance for government employees. Previously, employees were receiving a dearness allowance of 230% as per the Sixth Central Pay Commission. With the recent increase, the new dearness allowance has been revised to 239%.

Central DA vs state DA

Whenever a new pay commission is established (generally every 10 years), the Central government combines the Dearness Allowance (DA) with employees' basic pay, resetting it to 0 and then increasing the DA twice a year in January and July. The recommendations of the 7th Central Pay Commission came into effect on January 1, 2016. 

Some states are still operating under the 6th Pay Commission guidelines and determining DA hikes based on their own calculations. For example, Jharkhand government employees recently received a 9% DA hike, bringing their DA to 239% of the basic pay. 

States that have adopted the 7th Pay Commission typically align with the Central government in announcing DA increases, although they often trail behind the Central government's timeline. Like in Chhattisgarh, the Dearness Allowance (DA) for state government employees was raised by 4%.

Making the announcement on social media platform X, the Chief Minister’s Office (CMO) of Chhattisgarh wrote: “Chief Minister’s big announcement before the cabinet meeting – Dearness Allowance increased by 4%. The CM has given a Diwali gift to state employees, announcing an increase in the dearness allowance from 46% to 50%. State employees will benefit from this revised dearness allowance starting October 1.”