7th Pay Commission: Centre approves 4% DA for central government employees

The Union Cabinet on Wednesday, October 18, 2023, approved a 4% hike in dearness allowance (DA) for central government employees. This will increase the DA from 42% to 46%, effective from July 1, 2023. The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be Rs.12,857 crore per annum.

This will benefit about 48.67 lakh Central Government employees and 67.95 lakh pensioners.

The DA is a component of salary paid to government employees to compensate for the rise in the cost of living. It is calculated based on the Consumer Price Index (CPI) for Industrial Workers. The CPI is a measure of inflation, and the DA is revised twice a year, in January and July, based on the CPI data.

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The 4% DA Hike:

The 4% hike in DA is the highest in three years. It is also the first hike in DA since the outbreak of the COVID-19 pandemic. The government had frozen DA and other allowances during the pandemic to contain its fiscal deficit.

The recent announcement of a 4% DA hike by the government is a significant step towards fulfilling its commitment to provide financial stability and well-being to its employees. 

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DA Hike for Central Govt Employees: 

The DA hike is expected to boost the income of central government employees and pensioners at a time when inflation is high. It is also seen as a positive step by the government to show its appreciation for the hard work of its employees.

The DA hike is also likely to have a positive impact on the economy. It is estimated to inject around Rs 16,000 crore into the economy annually. This additional income is likely to be spent by government employees and pensioners on goods and services, which will boost demand and economic growth.

The DA hike is a welcome move for central government employees and pensioners. It will help them to cope with the rising cost of living and improve their quality of life.

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