Centre Announces 4% Hike in Dearness Allowance for Central Govt Employees

New Delhi: In a move aimed at providing relief to government employees and pensioners, the central government announced a 4% hike in Dearness Allowance (DA) and Dearness Relief (DR), effective from January 1, 2024. This increase brings the DA to 50% of basic pay, up from the existing 46%.

DA and DR aim to counter inflation, boosting overall employee remuneration. The hike will cost the exchequer Rs 12,869 crore annually, with an expected impact of Rs 15,014 crore for the year 2024-25.

Additionally, various allowances including transport, canteen, and deputation allowances have been raised by 25%. House Rent Allowance (HRA) has also increased to 30%, 20%, and 10% from 27%, 19%, and 9% respectively. Gratuity benefits have seen a 25% increase, with the ceiling raised to Rs 25 lakh from Rs 20 lakh.

The total burden on the exchequer due to these allowance adjustments is estimated to be Rs 9,400 crore annually. These changes align with the recommendations of the 7th Central Pay Commission.