NEW DELHI, Oct 1: The government has approved a three per cent increase in Dearness Allowance and Dearness Relief effective for its employees with retrospective effect from July 1, Union Minister Ashwini Vaishnaw said on Wednesday.
This is the second hike this year; in March a two per cent increase was announced, taking DA payouts from 53 per cent of basic pay to 55 per cent. That was after a three per cent hike in October.
DA is provided to government employees to compensate for inflation. The hike this month is expected to align with movement of Consumer Price Index (CPI), data for industrial workers that forms the basis for bi-annual revisions of the Dearness Allowance.
It will mean an employee with a basic salary of Rs 60,000 will receive an additional Rs 34,800 as DA, up from Rs 33,000 they were being paid after the March increase. Further revisions of salaries and allowances will be decided by the Eighth Pay Commission that was announced in January. However, an official notification about its members and terms of reference, is awaited.
Salary increments will depend on the ‘fitment factor,”, a multiplier applied to basic pay. Experts estimate this to be between 1.83 and 2.86, which could mean a hike of roughly 13 to 34 per cent. However, the DA – 55 per cent for now – will likely be reset to zero and merged with basic pay after the commission’s recommendations are implemented from January 1, 2026.
This means the effective increase might be moderated but still beneficial, as pensions are linked to basic pay and DA. The 7th Pay Commission had reviewed nearly 200 allowances, abolishing 52 and merging others to make the salary structure transparent and less complex.
(Manas Dasgupta)