GOVT MAY HIKE DEARNESS ALLOWANCE BY 3 PER CENT TO 45 PER CENT: REPORT

The dearness allowance for employees and pensioners is worked out on the basis of the latest (CPI-IW) brought out by the Labour Bureau every month

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The central government’s decision to increase the dearness allowance (DA) for its employees and pensioners by 3 per cent points to 45 per cent is a welcome move to offset the impact of inflation on their purchasing power. The DA is an essential component of the compensation package for government employees and plays a crucial role in maintaining their standard of living amid rising prices of essential goods and services. By aligning the DA with the prevailing inflation rates, the government aims to provide some financial relief to its workforce and retirees.

The calculation of dearness allowance based on the Consumer Price Index for Industrial Workers (CPI-IW) ensures that the adjustments are made in line with the changes in the cost of living index. This dynamic approach helps in keeping the DA in sync with the current economic conditions and helps the government fulfill its commitment to supporting its employees and pensioners during times of economic uncertainty. The increase in DA is likely to boost the morale of government employees and pensioners, as it acknowledges their valuable contributions while addressing the impact of inflation on their overall income.