Center raises DA and DR for government workers and pensioners by 4 percentage points.

After the Election Commission declared that there would be assembly elections in five states beginning on November 7, the cabinet decided to increase the DA by four percentage points.

Center raises DA and DR for government workers and pensioners by 4 percentage points - khabro tak

In advance of the holiday season and the crucial assembly elections, the Centre on Wednesday increased the dearness allowance (DA) for 4.86 million central government employees by four percentage points to 46% and the dearness relief (DR) for 6.8 million pensioners by a similar amount. This was done despite September’s sharp decline in retail inflation.

Anurag Thakur, the Union Minister for Information and Broadcasting, announced following the cabinet meeting that the new rates will be effective as of July 1, 2023.

The move will cost the exchequer a total of $12,857 crore per year.

An official who asked to remain anonymous said the decision was made by the Cabinet, which is presided over by Prime Minister Narendra Modi, in light of the three-month-long holiday season, which includes Navratra, Diwali, Chhat Puja, Gurupurab, and Christmas.

From July 1, 2023, both employees and pensioners would receive the increased sum, according to the official. According to the established methodology, which is based on the suggestions of the 7th Central Pay Commission, “this increase is generally in accordance with,” he continued.

The Election Commission stated last week that the assembly elections in five states — Mizoram, Chhattisgarh, Madhya Pradesh, Rajasthan, and Telangana — would begin on November 7. This move to raise DA is normal.

Experts predicted that more than 10 million families in general and the voters of the five states in particular will applaud the decision, which comes a week after retail inflation also sharply declined as a result of a major decline in vegetable inflation. However, they issued a warning that the deteriorating geopolitical scenario in the Middle East would once more cause a rise in food and gasoline prices, which would be bad for India. 87% of the crude oil used for processing in the nation is imported.

Retail inflation in India, as determined by the Consumer Price Index (CPI), increased to a 15-month high of 7.44% in July from 4.87% the month before, with food inflation reaching its highest level in 39 months as a result of rising prices for vegetables, grains, and pulses. As at 6.83% in August, it was still above the Reserve Bank of India’s (RBI) 6% upper tolerance zone. In September, it declined to 5.02%. In response to the explosion at the Gaza hospital, benchmark Brent crude increased by more than 3% to $92.61 a barrel on Wednesday.

Periodically, Central Pay Commissions are established to investigate various issues relating to the emolument structure, retirement benefits, and other working circumstances of central government employees and to offer suggestions on the necessary adjustments. In order to protect central government employees’ basic pay from inflation-related real value erosion and to adjust for cost of living, DA is provided to them, according to the Commission’s findings. Currently, the stipend is calculated using the CPI-IW for industrial workers.

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