There are strong expectations that the union cabinet will soon make the much-anticipated major decision about the Dearness Allowance (DA) and Dearness Relief (DR) hike for thousands of government workers and retirees. The January AICPI-IW figures saw a 0.5-point decline to 143.2, the second straight month-on-month decline.
With all eyes on the central government’s formal declaration, it is expected that DA and DR would climb by 2 percent this time around. Before Holi, central employees and retirees hoped that the government would once again declare an increase in the dearness allowance. However, they were disappointed when no adjustment of the dearness allowance was announced. It is anticipated that the wait for Dearness Allowance Hike 2025 will now come to an end.
Dearness Allowance Hike 2025
For more than 1 crore central employees and pensioners, there is exciting news. The dearness allowance increase has been decided. All inquiries regarding the employees’ dearness allowance have been addressed. Arrears of the months that were delayed will be paid, and the enhanced dearness allowance will be deemed effective on January 1, 2025. Following PM Modi’s chaired cabinet meeting, the dearness allowance hike will be announced.
A major decision about the employees’ dearness allowance (DA) and dearness relief (DR) will be made at this. At the same time, three figures have been released so far about the dearness allowance rise. Initially, it was reported that the increase would be two, three, or four percent; however, the increase has already been submitted.
December AICPI-IW Figures
December 2024 Consumer Price Index for Industrial Workers (2016=100): The December 2024 All-India CPI-IW was 143.7 down 0.8 points from November 2024’s 144. There are strong expectations that the union cabinet will soon make the much-anticipated major decision about the Dearness Allowance (DA) and Dearness Relief (DR) hike for thousands of government workers and retirees. Following approval, the updated DA Increase will take effect retroactively as per January 2025. Employees of the central government will get their two months’ arrears, or January and February, in addition to their increased March income.
Employees could receive Lowest DA increase in 7 Years
Government workers could receive the lowest DA boost in seven years, according to a news. This time, DA and DR are expected to expand by 2% as everyone awaits the central government’s formal announcement. The projected DA boost of 2 percent will be the lowest since July 2018.
In October 2024, the final DA Hike was announced, and a 3% hike in the Dearness Allowance for central government employees was approved by GOI. Central government employees now get a dearness allowance of 53% of their base pay instead of the prior 50%.
Increases in DA are done by taking into account changes in COL and using CPI-IW for industrial workers. Twice a year, GOI declares a DA/DR increase, however the announcements are made in September and March.
December 2024 Consumer Price Index for Industrial Workers (2016=100): The December 2024 All-India CPI-IW was 143.7 down 0.8 points from November 2024’s 144. Future DA and DR announcements will follow this similar pattern of changes.
Latest Updates on DA 2025 for Central Employees
2 times a year, the DA is updated, so on January 1 and July 1 of each year, GOI makes changes to the DA. Later, the government makes an announcement and the employees’ accounts are credited with the arrears for the months that were delayed.
The decision to raise employees’ dearness allowance has been made and it has been confirmed by AIC Price Index data. The December numbers show a clear decline in inflation, but it is still sufficient to raise the dearness allowance by 3%. The rate of inflation is now 55.99%. Only the large number is counted if it is more than 0.50. Thus, the dearness allowance will rise to 56%.
Central employee’s dearness allowance is being finalized to increase by 3% and so the minimum basic wage of central employees would rise significantly. The income of an employee will increase by Rs 540 per month, or 3 percent per month, if his minimal basic wage reaches Rs 18000. The yearly raise will be Rs 6480 at the same time.
With effect from April, Kerala announced a DA Hike
Dearness Allowance (DA) for government workers would increase from 12% to 15%, the Kerala government announced. Teachers, staff members of private colleges and polytechnics, aided school personnel, full-time temporary workers, and employees of local government organizations are also subject to the rise. Depending on their wage range, re-employed retirees, contingent workers, and part-time teachers will also be covered by the updated DA. The increased DA and Dearness Relief will be paid out starting in April 2025, along with salaries and pensions, and will be due starting in May 2025.
The raise does not, however, apply to entities such as the Kerala State Road Transport Commission (KSRTC) and the Kerala State Electricity Board (KSEB), who are required to follow their current protocols and obtain prior government permission before granting DA and Dearness Relief.
If the decision is approved by the organization’s board of directors, governing body, or executive committee and the costs can be covered by internal funds, organizations that are currently adhering to the state pattern of DA/DR can apply the updated rates without consulting the government. Government clearance must be obtained beforehand if the organization is unable to cover the expense.
Organizations that have plan or non-plan grants covering more than 90% of their wage or pension costs are permitted to distribute the updated DA/DR with internal governing body approval without first obtaining government clearance.
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