DA Hike Before Diwali: Gift of dearness allowance to central employees and pensioners before Diwali, eyes fixed on the cabinet meeting of October 21.


Just before the festival of Diwali and Dhanteras, the eyes of more than 49 lakh central employees and more than 65 lakh pensioners of the country are fixed on the official announcement of the Central Government. To provide relief from rising inflation, the next installment of Dearness Allowance (DA) and Dearness Relief (DR), which is revised twice a year, is being awaited for a long time. Discussions are at their peak between the central administrative corridors and employee organizations regarding the proposed Union Cabinet meeting on October 21. It is believed that in this meeting to be chaired by Prime Minister Narendra Modi, formal approval can be given to the much awaited increase of 3 percent in DA and DR. This news has increased the festive enthusiasm manifold among the government employees from the offices of Railways, Posts, Defense Accounts and Central Institutions in the capital of Uttar Pradesh, Lucknow, to the national capital New Delhi, because this time, along with the increased salary in the account, there is full hope that the outstanding arrears of three months will also come in lump sum.

On the basis of 12 months average data of All India Consumer Price Index (AICPI-IW), it is believed that dearness allowance will be increased by 3 percent in this half year. At present, the dearness allowance received by the central employees is at its fixed rate, after increasing it by 3 percent, the DA figure on the total basic salary of the employees will directly increase by 3 percent. Whenever the DA of July cycle is announced by the Central Government in October, it is considered to be effective from the previous date i.e. 1st July (Retrospective Effect). Its direct benefit is that the employees not only get the new salary with increased allowances, but the difference of July, August and September i.e. three months arrears is also credited to the bank account along with the salary of October.

Usually, the central government announces decisions related to DA and bonus in the cabinet briefing just one or two weeks before Diwali. In view of the festival of Diwali, its complete draft has been prepared by the Finance Ministry and the Department of Expenditure and sent to the Cabinet Secretariat. If this proposal is approved in the Union Cabinet meeting to be held on October 21, then it will be officially announced by the Union Minister through a press conference on the same evening. Soon after, the Department of Expenditure will issue an official Office Memorandum (OM) to update the new DA slabs in the payroll software of Defence, Railways, Posts, Central Armed Police Forces (CAPF) and autonomous bodies.

Dearness Allowance is always calculated on the basic pay prescribed in the pay matrix of the 7th Pay Commission. This new increase of 3 percent will have a direct impact on the monthly salary and pension of employees:

  • Pay-Level 1 (Minimum Basic Pay ₹18,000): For employees whose minimum basic salary is ₹18,000 per month, the 3 per cent increase in DA will result in a net increase of ₹540 per month. With this, by adding ₹ 1,620 to the three months’ arrears of July, August and September, a total additional financial benefit of ₹ 2,160 will be obtained in October.

  • Middle Level (Basic Pay ₹35,000): If the basic pay of an employee is ₹35,000, then there will be a direct increase of ₹1,050 in their monthly salary and the arrears of three months will become ₹3,150, which means ₹4,200 extra will come to the account on Diwali.

  • Senior Level (Basic Pay ₹56,100 – Level 10): For Class-1 Gazetted Officers, the monthly salary will increase by ₹1,683 and the outstanding arrears of 3 months will be ₹5,049, resulting in a bumper boost of ₹6,732 in the total take-home salary for October.

This decision is not limited only to serving employees, but will also prove to be a big support for more than 65 lakh senior and family pensioners of the country. According to pension rules, a similar increase of 3 percent will be applicable in the dearness relief given to pensioners. For example, if a retired employee’s basic pension is ₹25,000 per month, his monthly pension will be increased by ₹750 and 3 months’ outstanding arrears of ₹2,250 will also be sent to the pension account. Amid rising medical costs and everyday expenses, this additional relief during the festive season will be a big relief for the elderly.

Soon after the official announcement of DA by the Central Government, various states of the country—such as Uttar Pradesh, Bihar, Rajasthan, Madhya Pradesh and Haryana—also announce DA and bonuses for their state employees, teachers of aided educational institutions and municipal corporation workers. About 16 lakh state employees and 11 lakh pensioners in Uttar Pradesh are also keeping an eye on this decision, because as soon as the Centre’s notification is issued, the Finance Department, Lucknow issues a mandate for similar DA hike for state employees and Diwali bonus for non-gazetted employees. With the possible approval on October 21, the joy of Diwali this time in crores of families of the country is certain to be doubled.

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