The Dearness Allowance (DA) serves as a means to combat inflation by providing additional income to government employees. In a series of recent developments, various state governments have taken steps to raise the dearness allowance.
The most recent announcement comes from the Government of Tamil Nadu, which has decided to increase the Dearness Allowance (TN DA Hike) for its employees. This adjustment will result in higher salaries for state government employees and increased pensions for retirees, and it will be implemented from April 1st.
On Wednesday, Tamil Nadu Chief Minister MK Stalin declared a 4 percent increase in the dearness allowance for employees and pensioners under the 7th pay commission. The state government officially confirmed this decision, stating that it would take effect from the beginning of the financial year, ensuring that Tamil Nadu government employees and pensioners receive the increased DA benefits starting from April 1, 2023.
Previously, Tamil Nadu government employees and pensioners were receiving a dearness allowance of 38 percent, but this rate will now be raised to 42 percent. The statement also highlights that eligible employees and pensioners will receive the increased rate of dearness allowance from April 1, 2023, along with arrears payments.
It is important to note, however, that the state government acknowledges the significant burden this increase in dearness allowance will impose on the treasury. While the direct beneficiaries of this decision are the state government employees and pensioners who will receive higher salaries and pensions each month, it is estimated that approximately 16 lakh individuals will directly benefit from the DA increase. Nevertheless, implementing this decision will result in an annual burden of Rs 2,367 crore on the state government's exchequer.
Similar increases in dearness allowance have also been seen in other state governments. For instance, the Uttar Pradesh government, led by Yogi Adityanath, raised the allowance from 38 percent to 42 percent under the 7th Pay Commission, effective from January 1, 2023. In April, the Bihar government announced a 4 percent increase in DA, while the Himachal Pradesh government implemented a 3 percent raise in DA during the same month.
