Cabinet approves 4% increase in government employee allowance

New Delhi:

The central government has increased the allowance for its more than 1 million employees and pensioners by 4 percent, from 38 percent to 42 percent. Union Minister Anurag Thakur said the center will spend Rs 12,815 crore to fund the increase in Love Allowance or DA.

The government gives tax breaks to its employees DA and retirees to compensate them for rising prices. It is calculated based on the latest consumer price index for industrial workers or CPI-IW.

The DA increase was applied retrospectively from January 1, 2023, the government said.

“…This will benefit some 47.58,000 central government workers and 69.76,000 retirees. This increase is in line with the accepted formula based on the recommendations of the 7th Central Wage Commission,” the government said in a statement.

The DA was last revised in September 2022, retroactive to July 1, 2022. At that time, too, it was increased by 4 percent to 38 percent.

DA is regularly revised twice a year.