Sumana Das, Pune
Amid the retail inflation hike, central government employees are eagerly waiting for the July DA (Dearness Allowance) surge. Although no important announcement has been made so far, some speculations and reports are conveying the scheme to be announced in September.
As the retail inflation has hit high continuously for 15 months now, some reports are anticipating the government to increase the DA points by 3 per cent to 45 per cent.
But what is Dearness Allowance?
In India, Bangladesh, and Pakistan, the government pays retirees as well as employees of public sector units (who are also considered to be employees of the government) a Dearness Allowance (DA) that is based on inflation.
To lessen the impact of inflation on people, dearness allowance is determined as a percentage of an Indian citizen’s basic income. For pensioners, both housing and DA work. The DA guidelines are quite dynamic in nature and vary on the basis of different locations. This fully taxable allowance comes in two types:
- Dearness Allowance is given under terms of employment.
- Dearness Allowance is not given under the terms of employment.
Thousands of central government employees who have been waiting for the announcement of the Dearness Allowance (DA) have received the much-needed zeal from the most recent AICPI (All India Consumer Price Index) Index statistics. The final information gets used to calculate Dearness Allowance and the basis for establishing the DA quantum is the AICPI Index. The AICPI Index numbers for the month of June show a positive trend.
The government has released the AICPI index data for June 2023, which demonstrates a significant increase in the index. In contrast to the index number in May, which was 134.7 points, the June index hit 136.4 points. There has been an overall gain of 1.7 points in June. The total DA score was 45.58 per cent in May, but based on the index data, that number will rise to 46.24 per cent in June 2023.
Speaking to PTI, Shiva Gopal Mishra, general secretary of the All India Railwaymen Federation, stated, “The CPI-IW for June 2023 was announced on July 31, 2023. We want the dearness allowance to increase by four percentage points. But the increase in the dearness allowance amounts to just a little bit over three percentage points.” According to him, beyond the decimal point, the increases in DA are not taken into account by the government. DA is therefore anticipated to rise by three percentage points to 45 per cent.
He continued by saying that the Finance Ministry’s expenditure division will draft a proposal to increase DA along with the income implications and submit it for approval to the Union Cabinet.
Currently, a 42 per cent dearness allowance is paid to nearly one crore central government employees and pensioners.