Cabinet raises DA for central staff and pensioners by 3 points to 63 per cent ahead of Diwali

Just before Diwali, central government employees and pensioners have received good news. The Union Cabinet, chaired by Prime Minister Narendra Modi, formally approved a 3 per cent increase in dearness allowance (DA). The decision will place an annual burden of Rs 10,016 crore on the central exchequer.

Employees' dearness allowance, which stood at 60 per cent so far, has risen to 63 per cent. The decision was cleared at the recent Cabinet meeting. The higher allowance is being seen as a big Diwali gift for employees, and the possibility that October salaries will come with the increase cannot be ruled out.

An example shows how much difference it will make to pay. Suppose an employee's basic salary is Rs 25,000. At the new rate of 63 per cent, the DA will be Rs 15,750, taking the employee's total pay to Rs 40,750. The increase applies to the dearness allowance of both serving central government employees and retired employees.

The central government revises its employees' allowance twice a year, for the January and July periods. The decision on the January increase is usually announced in March or April, while the July increase is decided at a meeting in September or October.

Dearness allowance has risen steadily under the Modi government since 2014, barring a few exceptions during the Covid period. Lakhs of central employees and pensioners across the country are pleased with the latest increase.

The same meeting also announced a festival bonus for railway employees. The government has formally approved the productivity-linked bonus (PLB) for all eligible non-gazetted railway employees in the country.

Briefing the media on the Cabinet decisions, Railway Minister Ashwini Vaishnaw said a bonus equal to 78 days' pay has been approved on the occasion of Diwali to recognise the good work of railway employees. About 11,40,770 railway employees will benefit directly, and the central government will disburse a total of Rs 2,009.61 crore for this.