New Delhi: “The Union Cabinet, chaired by the Prime Minister Narendra Modi, has approved an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 01.07.2024 representing an increase of three percent (3%) over the existing rate of 50% of the Basic Pay/Pension, to compensate against price rise,” said an official release.
This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission. The combined impact on the exchequer on account of both DA and DR would be Rs.9,448.35 crore per annum.
This will benefit about 49.18 lakh central government employees and 64.89 lakh pensioners.
Dearness allowance (DA) increases the take-home salary of central government employees and pensioners, as it is a component of their wages. The following calculation reveals the anticipated salary increase for central government employees following the recent DA hike.
The base pay of central government employees is used to compute DA. In the updated pay structure, “basic pay” refers to the salary calculated at the designated level in the Pay Matrix as per the government-accepted recommendations of the 7th CPC.
Assume that a central government employee receives a base salary of Rs 46,200. His dearness allowance was Rs 23,100 earlier, at 50%. His dearness allowance will increase to Rs 24,486 when it rises to 53%. He will therefore start receiving Rs 1,386 more in DA in October. He will receive arrears for the previous three months as the DA hike is applicable from July 1, 2024.
As with the DA, there has been a 3% increase in the Dearness Relief (DR) for central government pensioners. The DR now stands at 53%. In light of the DR raise, how much will the pensioners’ monthly benefits increase?
Let’s say a pensioner from the central government receives a baseline monthly pension of Rs 50,400. The pensioner used to receive Rs 25,200 at 50% DR. Now that his DR has increased to 53%, he will receive DR of Rs 26,712 per month. His pension will therefore increase by Rs 1,512 a month.
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