DA likely to be hiked by 3% to 34% from this New Year

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Although it has not been determined how much the Dearness Allowance (DA) would be increased in January 2022, according to the AICPI index data, a 3% increase is projected. Employees' salaries are projected to rise in tandem with the growth in DA.

According to experts, the dearness allowance could be increased by 3% in January 2022, bringing the overall DA percentage from 31% to 34%. According to AICPI data, Dearness Allowance (DA) is expected to be 32.81 percent in September 2021. This figure/data will be crucial in determining whether or not to raise the DA by another 3%. Although there is no definite information about the government's next move, the DA rise is extensively publicised in the media.

To compensate for price increases, the Union Cabinet, chaired by Prime Minister Narendra Modi, approved the release of an additional instalment of Dearness Allowance to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 1.7.2021, representing a 3 percent increase over the existing rate of 28 percent of Basic Pay / Pension.

This raise was made in accordance with the approved methodology, which is based on the 7th Central Pay Commission's recommendations. The total impact of Dearness Allowance and Dearness Relief on the exchequer would be Rs.9,488.70 crore per year. About 47.14 lakh Central Government employees and 68.62 lakh retirees will profit from this.

Due to the exceptional situation created by the COVID-19 epidemic, three more instalments of Dearness Allowance (DA) for Central Government employees and Dearness Relief (DR) for pensioners, due on January 1, 2020, July 1, 2020, and January 1, 2021, were frozen.

With effect from July 1, 2021, the government increased the Dearness Allowance for Central Government employees and Dearness Relief for pensioners to 28 percent, an increase of 11 percent above the previous rate of 17 percent. The increase reflects the additional instalments due on January 1, 2020, July 1, 2020, and January 1, 2021.

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