1 August 2023, Mumbai: Central government employees are in for some good news as the final AICPI (All India Consumer Price Index) data for June 2023 has been released, indicating a significant increase in the index. The AICPI index number for June stands at 136.4 points, a notable rise from May’s 134.7 points. This rise in the index could lead to a positive revision of Dearness Allowance (DA) for the employees.
DA Expected to Reach 46 Percent
Media reports suggest that with the recent AICPI index numbers, central government employees may receive DA at the rate of 46 percent. The government is expected to announce this increase in DA in September, following the recommendations of the 7th Central Pay Commission. The revised DA will be applicable from July to December 2023.
Current DA Rate and Arrears
Until the new DA rates are officially announced by the government, employees will continue to receive DA at the rate of 42 percent. However, once the increase is confirmed, employees will receive the enhanced DA amount along with the arrears for the intervening period. Over 1 crore central government employees and pensioners are expected to benefit directly from this increase.
Recap of Previous DA Hike
In March 2023, the Union Cabinet, chaired by Prime Minister Narendra Modi, approved an additional instalment of DA to Central Government employees and Dearness Relief to Pensioners, effective from January 1, 2023. This additional instalment represented a 4 percent increase over the existing rate of 38 percent of Basic Pay/Pension, aiming to counteract price rise. The combined impact on the exchequer due to both DA and Dearness Relief was estimated to be Rs. 12,815.60 crore per annum, benefiting around 47.58 lakh Central Government employees and 69.76 lakh pensioners.
As the AICPI index shows promise, central government employees await the official announcement in September, hoping for a positive boost to their Dearness Allowance.