Dearness allowance (DA) given to central employees has been increased by 3%. The decision on the hike was taken in the cabinet meeting held on Wednesday (October 16).
After this increase before Diwali, the dearness allowance has increased from 50% to 53%. About 49.18 lakh central employees and 64.89 lakh pensioners will benefit from this.
DA increases every 6 months. The increased DA will be applicable from July 1. That is, employees will get 3 months’ arrears.
Benefits of Rs 330 on the basic salary of 10,000
For this, enter your salary in the formula (Basic Pay + Grade Pay) × DA% = DA Amount
To determine the new salary, we add the basic salary and grade salary, which in turn increases the dearness allowance (DA) rate. Now let’s understand this with an example, suppose your basic salary is Rs 10,000 and grade pay is Rs 1000.
After adding both, the total is Rs 11,000. In such a situation, after the increase, if we look at it in terms of 53% dearness allowance, it is Rs 5,830. After adding everything, your total salary is Rs 16,830. At the same time, in terms of 50% dearness allowance, you are getting a salary of Rs 16,500. That is, after the increase of 3% DA, there will be, consequently, a benefit of Rs 330 every month.
Employers provide Dearness Allowance to deal with inflation
The government provides DA to its employees to cover the inflation-induced increase in living expenses.
Government employees, public sector employees, and pensioners receive this money every 6 months, calculated based on the current inflation of the country.
The basic salary determines the calculation of DA for each employee, based on their respective pay scales. DA amounts may vary for urban, semi-urban, and rural employees.
How does one calculate the dearness allowance?
A formula has been given for calculating DA. (Average of All India Consumer Price Index (AICPI) of last 12 months – 115.76)/115.76]×100.
Now if we talk about the DA of people working in PSU (Public Sector Units), then the method of its calculation is-
Dearness Allowance Percentage= (Average of Consumer Price Index of last 3 months (Base Year 2001=100)-126.33) x 100
What is the All India Consumer Price Index?
India has two types of inflation: retail and wholesale inflation. The retail inflation rate is based on the prices that common customers pay. It is also referred to as the Consumer Price Index (CPI).
