The Central Government revises the Dearness Allowance (DA) twice a year, on January 1st and July 1st. This year, Central government employees were eagerly awaiting of the DA news scheduled to be revised from July 2023. The Central Government has decided to increase the Dearness Allowance for central employees by 4% based on the Consumer Price Index for Industrial Workers (CPI-IW).

The announcement was made by the Union Minister Shri Anurag Thakur through a press conference. As everyone knows, the prices of goods and services increase over time, which is referred to as inflation. The Labor Department releases CPI-IW figures every month, which helps estimate the inflation rate for that month. Based on the CPI index, the Central Government increases the DA every six months. This increase in DA benefits nearly 1.16 crore government employees and pensioners.

Revised DA and Effective Date

The 4% increase in DA will be effective from July 1, 2023. With this increase, the total DA for Central government employees will reach 46%. The DA was at 42% before this revision. Prior to this, there was a 4% increase in DA on January 1, 2023, which was announced on March 25, 2023. After the 4% increase in January 2023, the total Dearness Allowance stood at 42%. The next DA revision will take place in January 2024. As we all know that when the DA crosses 50%, all allowances for Central government employees are also revised. It is expected that DA will cross the 50% mark in 2024.

Payment of DA Arrears

After the increase in DA from July 1, 2023, Central government employees will receive arrears for three months. Although the government did not specify when the DA arrears would be credited to employees' accounts, it is a customary practice to credit DA arrears with the next month's salary after the announcement. This time, it is expected that DA arrears will be credited along with the October salary.