Union Cabinet approves 3% DA hike 

The Union Cabinet on Wednesday approved a 3% Dearness Allowance (DA) for central government employees and pensioners in a Diwali bonanza. Information & Broadcasting Minister Ashwini Vaishnaw informed this during a Cabinet briefing. After the 3% hike, the DA will increase to 58%.The revised DA will come into effect from July 1.

The move is aimed at providing relief to nearly one crore central government employees and pensioners. Dearness Allowance is a cost-of-living adjustment that the government pays to its employees and pensioners to offset the impact of inflation on their household expenses.

The hike is made in line with the recommendations based on the Consumer Price Index (CPI) data for industrial workers, which forms the basis for calculating DA revisions twice a year. DA is usually revised in January and July every year to help employees manage rising prices.

Earlier this year, the government had approved a 2% increase in DA in March, raising it from 53% to 55% of the basic salary and pension. The new hike will add to this figure and directly improve take-home pay and pensions. For example, an employee with a basic salary of Rs 50,000 currently gets Rs 26,500 as DA after the last hike. With the new increase, this amount will go up further, providing some relief amid high living costs.