According to sources it seems that the government may increase the subsidy on this date. government employees have been waiting for a long time for the increase in Dearness Rate (DA). Now there is a new update regarding DA hike. Between navratri and Diwali, the central government may announce a hike in dearness allowance to employees. The DA hike, once notified, will be deemed effective from July 1, 2023. While earlier media reports had suggested that the DA would be increased by 3 percent, it is believed that the hike could be more than 3 percent as per the discount rate. central government employees may get a 4 percent hike as per the DA calculation formula based on the new Consumer Price Index for Industrial workers (CPI-IW). After this hike, the depreciation rate will reach 46 percent.
DA is given to government employees and Dearness Relief (DR) to pensioners. DA and DR increase twice a year – january and July. At present, more than one crore central government employees and pensioners are getting 42 per cent subsidy. Last march 2023, DA increased by 4 percent to 42 percent. Considering the current rate of inflation, the next DA hike is expected to be 4 percent. Recently, several state governments like Madhya Pradesh, Odisha, Karnataka, jharkhand and himachal pradesh have increased the dearness allowance for their state government employees.
The hike in DA and DR is determined based on the percentage increase in the 12-month average of the All india Consumer Price Index (AICPI) for the period ending june 2022. However, the central government revises the allowances on january 1 every year. and 1 July. Most of the governments have announced hikes in march and September-October. This is expected to happen this time too. In 2006, the central government revised the calculation formula of TA and TR for central government employees and pensioners. Percentage of Inflation = ((Average of AICPI (base year 2001=100) for last 12 months -115.76)/115.76)x100. For Central Public Sector Employees: Allowance Percentage = ((Average of All india Consumer Price Index (AICPI) (Base Year 2001=100) for last 3 months -126.33)/126.33)x100.
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