DA Hike Of 3% Expected In Next Cabinet Meeting, Says Employee Union

The dearness allowance, or DA, paid to central government employees, aimed at offsetting the impact of inflation, is expected to be raised in the next meeting of the Union Cabinet, according to employee unions.

"The DA hike will happen in the next Cabinet meeting. We are expecting an increase of at least 3%," a senior official of the Confederation of Central Government Employees & Workers said.

As per the precedent, the Union Cabinet chaired by Prime Minister Narendra Modi meets on every Wednesday. This means that the decision on increasing the DA could be taken in the meeting to chaired today, i.e., Oct. 9. However, there is no official confirmation in this regard.

All India Railwaymen's Federation General Secretary Shiv Gopal Mishra also indicated that the DA could be hiked in the upcoming Cabinet meeting.

Considering the inflation and the cost of living index, a decision is likely to be taken by the government at the earliest, Mishra said. However, the union leader refrained from projecting the hike in percentage terms.

The announcement of DA hike is usually coupled with a similar increase in dearness relief, or DR, which is paid to the retired government employees.

The increase in DA and DR would benefit around one crore employees and pensioners. If announced by the Cabinet, it would be timed just ahead of the upcoming festival of Diwali.

Notably, the DA hike formula is based on the average of the All India Consumer Price Index, or AICPI, for the previous 12 months. This makes it a key aspect of calculating salaries for government employees.

The Centre, which reviews DA biannually, last raised it by 4% in March 2024. This took DA from 46% to 50% of the basic pay.

Several other allowances, including house rent allowance, were also revised earlier this year when the DA reached 50% of the basic pay, the Confederation of Central Government Employees confirmed. This was done in accordance to the provisions of the 7th Pay Commission.

The 7th Pay Commission, which was formed a decade ago, had proposed that the basic pay should be automatically revised once the DA crosses 50%, the employee unions said. "However, the proposal was not approved by the government... We will certainly raise this demand before the 8th Pay Commission when it is formed," Mishra said.