DA Hike: The Central Government’s announcement regarding the Dearness Allowance (DA) hike for its employees has been eagerly awaited. Despite it being applicable from July 1, employees typically face a 3-4 month waiting period extending till October. This delay often raises questions. While the government compensates employees with arrears for the waiting period, one might wonder about the reasons for the postponement.
Why the Delay in DA Adjustment?
Two main reasons account for this delay:
- Delay in Receiving AICPI Data: The first significant factor is the lag in the release of the All-India Consumer Price Index (AICPI) data. The DA adjustment from July is based on data from January to June. However, the AICPI number for June gets finalized only by the end of July. Hence, any decision regarding the DA hike can’t realistically be made before August.
- Financial Strain on the Government Treasury: Another major reason is the financial implication on the government’s treasury. Under the 7th Pay Commission, providing a DA increase would impose a financial burden ranging from 12,000 to 18,000 crore rupees. To manage these costs, the government tends to delay the hike in DA/DR rates by 3-4 months. During this waiting period, the government strategically invests this money to earn interest, thereby offsetting some of the additional costs. This practice is standard, making the delay somewhat inevitable.
When Will the DA Hike Be Announced?
According to the Confederation of Central Government Employees and Workers, DA and relief due to inflation usually see hikes from January 1 and July 1. Yet, the central government usually announces this only by March or September. This year, the delay is expected to be longer. Despite half of October already past, no official statement has been released. There’s hope, however, that the government might make an announcement before Dussehra, serving as a festive gift for central employees.
Growing Anticipation and Demands
Sources suggest that the Confederation has penned a letter to the Finance Minister urging a prompt declaration concerning the DA payment. Yet, there’s been no official comment from the ministry on this matter. The delay not only affects employees financially but also impacts their ability to cope with the cost of living, which is the primary purpose of the DA. It’s worth noting that the hike benefits around 48 lakh central government employees and over 62 lakh pensioners.
The anticipation is palpable. As the wait continues, employees hope for an official announcement sooner rather than later.