Home / News / India /  DA hike: Good news for central govt employees as govt plans to hike dearness allowance to 42%
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In an apparent good news for the central government employees, the Centre is expected to increase dearness allowance (DA) for its more than one crore employees and pensioners by four percentage points to 42 per cent from existing 38 per cent as per the agreed formula for the purpose.

The DA hike will be effective from 1 January this year, according to a PTI report.

The DA for employees and pensioners are worked out on the basis of the latest Consumer Price Index for Industrial Workers (CPI-IW) brought out by the Labour Bureau, a wing of the Labour Ministry, every month.

The Labour Ministry increases the DA in view of the inflation of many important things in the AICPI (All India Consumer Price Index) index.

"The CPI-IW for December 2022 was released on January 31, 2023. The dearness allowance hike works out to be 4.23 per cent. But the government does not factor in hiking DA beyond decimal point. Thus DA is likely to be increased by four percentage points to 42 per cent," All India Railwaymen Federation, General Secretary, Shiva Gopal Mishra told PTI.

Mishra further explained that the expenditure department of the Ministry of Finance will formulate a proposal to hike DA along with its revenue implication and will put up the proposal before the Union Cabinet for approval.

At present, more than one crore central government employees and pensioners are receiving 38 per cent DA.

Last revision in DA was done on 28 September last year, which was effective from 1 July, 2022.

The Centre had increased DA by four percentage points to 38 per cent based on the percentage increase in 12 monthly average of All India Consumer Price Index for the period ending June, 2022.

The DA is provided to employees and pensioners to compensate them for rising prices. The cost of living increases over a period of time and is reflected through CPI-IW.

The allowance is revised periodically twice a year.

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