Dearness Allowance/Dearness Relief is based on the rise in inflation and increase in prices of essential commodities.
Dearness Allowance for Central Government Employees: The Union government has said that Dearness Allowance (DA) and Dearness Relief (DR) is due for Central Government Employees and Pensioners with effect from January 1, 2020. The due DA/DR will be paid this month as it is normally done, according to the Government. In a written reply to a question in Rajya Sabha, Minister of State for Finance Anurag Thakur said last week that DA and DR of Central Government Employees have become due from January 1.
Thakur said, “Dearness Allowance and Dearness Relief are granted to serving employees and pensioners of the Central Government respectively each year with effect from 1st January and 1st July and normally paid in the month of March and September respectively.”
The minister further said that DA/DR is based on the rise in inflation and increase in prices of essential commodities. The increase in DA allowance is in line with increase in the price of essential items. The level of inflation considered for calculating DA/DR is based on the All India Consumer Price Index for Industrial Workers issued by Labour Bureau in Shimla, Himachal Pradesh.
“The level of inflation for the purpose of DA/DR to Central Government Employees/Pensions is calculated on the basis of All India Consumer Price Index for Industrial Workers which is issued by Labour Bureau, Shimla,” said Thakur.
In October 2019, the Union Government has raised the existing DA of Central Government Employees from 12 per cent to 17 per cent of the Basic pay with effect from July 1, 2019. An Office Memorandum of the government had then said that the term Basic Pay in the revised pay structure as per the prescribed Leven in the Pay Matrix recommended by the 7th Pay Commission. In January this year, the Himachal Pradesh government had raised Dearness Allowance for its employees by 5 per cent.