Cabinet approves 4% increase in dearness allowance of central employees
| Now 50% allowance will be given
7th Pay Commission DA Hike | (The Karbhari News Service) – Central employees will now be given dearness allowance at the rate of 50 percent from January 1, 2024. It has been approved by the Union Cabinet. It was approved in a special cabinet meeting held on Thursday.
7th Pay Commission DA Hike : There is good news for central employees. Increase in dearness allowance has been approved. The Union Cabinet has approved a 4 percent increase in dearness allowance. Now employees will get 50% dearness allowance. This Dearness Allowance will be applicable from January 1, 2024. It will be credited with salary at the end of March. A total of two months of arrears will also be added to this. For the fourth time in a row, inflation allowance has been increased by 4 percent.
Rate determined from December AICPI index
Central employees will now be paid Dearness Allowance at the rate of 50 percent from January 1, 2024. This is evident from the December AICPI index data. However, the index fell by 0.3 points to 138.8 points in December. But, this did not make a significant difference in the inflation allowance figures. As expected, the dearness allowance went beyond 50 percent. Now dearness allowance has increased to 50.28 percent. But, the government decimal is below 0.50, so only 50 percent will be final. It is certain that it will increase by four percent.
What has changed in AICPI index?
When will the benefit of increased DA be available?
In the meeting of the Union Cabinet, approval was given to increase the inflation allowance. Before Holi in March, the government has given a big gift to the employees. Employees will get this benefit from January 1, 2024. This means that the new dearness allowance will be applicable from January 1. Apart from this it is possible to pay it in March salary along with January and February arrears.
After 50 percent DA will be 0
Central employees will get 50 percent allowance from January 2024. But, after that the dearness allowance will come to zero. After this the calculation of inflation allowance will start from 0. 50 percent DA will be added to the basic pay of the employees. Suppose, if an employee’s minimum basic pay as per his pay band is Rs.18000, then 50 percent of Rs.9000 will be added to his salary.
Why will dearness allowance be reduced to zero?
Whenever a new pay scale is implemented, the DA received by the employees is added to the basic pay. According to experts, 100 percent of the DA received by the employees should be added to the basic salary, but that is not possible. The financial situation becomes difficult. However, this was done in 2016. Before that, the sixth pay scale came in 2006, at that time 187 percent allowance was being given in the fifth pay scale till December. The entire DA was merged with the basic pay. Therefore, the coefficient of the sixth pay scale was 1.87. Then new pay bands and new grade pay were also created. However, it took three years to deliver it.