DA hike by 3% for all central government employees ahead of Diwali

The central government has announced a 3% DA hike for employees and pensioners, bringing it to 53% of the basic pay, compared to 50% earlier

The centre has announced a 3% DA hike for all central government employees and pensioners, bringing it to 53% of the basic pay, compared to 50% earlier. This comes just ahead of Diwali celebrations after a significant delay in its announcement.

The centre hiked the dearness allowance (DA) for all central government employees by 3% (Amit Dave/Reuters)

What is Dearness Allowance (DA)?

Dearness allowance refers to the adjustment of the pay to keep up with inflation and rising living costs, calculated on the basis of the All India Consumer Price Index (AICPI).

The central government does a DA hike two times a year in January and July, with announcements made around Holi in March and around Diwali in September, with the arrears of the hike paid off henceforth.

For this year specifically, the DA hike for July got significantly delayed, with the announcement originally being expected before the Haryana elections held on October 5.

Because of this, the Confederation of Central Government Employees and Workers wrote to Finance Minister Nirmala Sitharaman, drawing attention to it.

Similar to the DA hike, the dearness relief (DR) will also be hiked accordingly. DR is the same pay adjustment, but for pensioners.

As it comes just around the festive season, the DA hike may also provide a boost to consumer spending.

This also comes after the Himachal Pradesh government gave its employees an early Diwali gift by issuing a 4% DA hike just before Dussehra, in a move estimated to benefit the roughly 180,000 employees and 170,000 pensioners of the state.

Similarly, Chhattisgarh's Chief Minister Vishnu Deo Sai also announced a 4% DA hike for its nearly 3.9 lakh state government employees, taking it to 50% of the basic salary.