The Central Government has recently increased the Dearness Allowance (DA) for Central Government Employees and Dearness Relief (DR) for Central Government pensioners by 4%, with the revised rates becoming applicable from January 1, 2023. As a result, employees are now eagerly awaiting the next DA hike, which is expected to take effect from July 2023.
The Dearness Allowance rate is determined by the Government based on the All-India Consumer Price Index for Industrial Workers (CPI-IW) data released by the Labour Bureau under the Ministry of Labour and Employment. According to a press release by the Labour Bureau, the AICPI-IW for February 2023 decreased by 0.1 points to 132.7. The AICPI-IW data for March 2023 will be released on 28th April 2023. However, the February data suggests that the DA/DR rate may further increase by 3%.
Currently, the rate of DA/DR for employees and pensioners is 42%. Based on the AICPI-IW data for February 2023, the rate may go up to 45% in the next revision. However, confirmation of the expected DA/DR rate from July 2023 will be provided after the release of AICPI-IW data for the months leading up to July, which are March, April, May, and June 2023.
It is important to note that dearness allowance is given to employees against their Basic Pay, which is drawn in accordance with the 7th Pay Commission Pay Matrix's stated Level but does not contain any other kind of special pay, etc.
As of January 1, 2023, the Finance Ministry will increase the rate of DA for workers of the Central Government and Central Autonomous organisations who receive their salaries according to the 6 Pay Commission scale/Grade Pay from 212% to 221% of Basic Pay. In an office memo dated April 10, 2023, the Department of Expenditure under the Ministry of Finance acknowledged this increase.
In conclusion, employees can look forward to a possible DA/DR rate hike from July 2023, which will be confirmed after the release of AICPI-IW data for the months leading up to July. It is essential to keep track of the latest updates regarding this matter to know how it will impact the employees and pensioners of the Central Government.
