Decisions on Dearness Allowance (DA) and Dearness Relief (DR) for central government employees and pensioners has yet to be made, although many were expecting an announcement ahead of the Holi festival. There were reports suggesting that following its meeting on March 19th, Union Cabinet might make an announcement – however this didn’t materialise either.
Now, sources claim that the government can close it at any time; its decision took time due to government procedures and financial approvals.
What is Disability Allowance (DA), and who qualifies?
This allowance, directly tied to basic pay of government employees and pensioners alike, is increased twice every year by the government in response to inflationary pressure.
Central government employees and pensioners generally qualify for cost-of-living adjustments through this allowance, while private sector workers usually do not. Employees employed at PSUs also typically receive this allowance.
Usually, the government announces an increase in Daily Allowances (DA) before Holi and for July-December before Diwali; but due to issues surrounding Holi this time around, January-June 2025 cycle’s hike could not be announced until after Holi. A possible increase of up to two per cent, raising DA from 53% to 55% could occur using All India Consumer Price Index Data from July-December 2024 as its source.
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When will the decision regarding an increase in disability assessments come down?
As this decision has already been postponed, the government can vote in its favour at its next cabinet meeting (scheduled for next week) if this one has already been deferred. Once approved, an increased DA rate will take effect as early as January 2025 and employees could even receive arrears payments of January, February, and March in their April paycheque.
How much will employees and pensioners gain from working together?
At an annual increase of 2 percent, an increase of Rs 360 will mean an extra benefit of Rs 4,320 being available each month.
Similarily, if the basic pension amount was Rs 9,000 then monthly increases will equal Rs 180 annually and therefore provide an annual benefit of Rs 2,160.
Experts predict a more than two percent DA increase, perhaps even four, due to RBI’s revised inflation forecast of 4.8% over its original 4.5% forecast for this financial year.
Now all eyes are upon the government’s decision!
Increased DA payments to government employees and pensioners should bring both an increase in pay as well as relief from inflation. Although, due to recent trend changes, this year’s increase is likely to be smaller than in prior years and thus reduce expectations among the employees somewhat. All eyes are now upon the government as we wait to hear when and in what form their decision comes through!
