On October 18, 2023, the Union Cabinet approved a 4% increase in dearness allowance (DA) for more than one crore Central government employees and pensioners, raising it from the existing 42% to 46%. Additionally, the Cabinet granted approval for a 78-day salary bonus equivalent to non-gazetted Railway employees, benefiting approximately 11.07 lakh employees.
This DA adjustment is based on the latest Consumer Price Index for Industrial Workers (CPI-IW), which is released by the Labour Bureau monthly. Currently, central government employees and pensioners receive a 42% dearness allowance. The previous DA revision took place on March 24, 2023, and was effective from January 1, 2023.
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The increase in DA, a compensation for the rising cost of living, is determined by the percentage change in the 12-month average of the All India Consumer Price Index, concluding in December 2022. It is a measure to address the economic impact of inflation on employees and pensioners and is subject to periodic revisions, occurring twice a year.
