Finmin OM: Dearness Allowance Raised to 53% for Central Govt Employees from July 2024

The Ministry of Finance has officially announced the revision of Dearness Allowance (DA) rates, effective from July 1, 2024. This decision is aimed at helping employees cope with inflation and rising living expenses.

Key Highlights of the Dearness Allowance Revision

• The Dearness Allowance has been increased from 50% to 53% of the Basic Pay, effective from July 1, 2024.
• This increase applies to the Basic Pay drawn in the prescribed levels of the Pay Matrix as per the 7th Central Pay Commission (CPC) recommendations. The new DA rate will not cover other components like special pay or additional benefits.

This revision follows the government’s ongoing commitment to periodically adjust the Dearness Allowance, ensuring that Central Government employees’ salaries remain aligned with current inflation rates.

What the DA Increase Means for Employees

The Dearness Allowance is a key component of the salary package for Central Government employees, and this 3% increase marks an important adjustment. However, it is important to note that DA will continue to be treated as a separate element of remuneration and will not be regarded as pay under FR 9(21). This means it will not impact allowances or benefits directly tied to basic pay.

Payment Rounding Rules

In accordance with standard procedures:

• Fractions of 50 paise or more will be rounded up to the next higher rupee.
• Fractions less than 50 paise will be ignored.

Applicability and Separate Orders for Defence and Railways

This DA increase also applies to civilian employees paid through the Defence Services Estimates. The expenditure will be chargeable to the relevant head of the Defence Services budget. Separate orders for Armed Forces personnel and Railway employees will be issued by the Ministry of Defence and the Ministry of Railways, respectively.

Special Provisions for Indian Audit and Accounts Department

Employees serving in the Indian Audit and Accounts Department will also see this DA increase, with the revision made in consultation with the Comptroller and Auditor General (CAG) of India, as per Article 148(5) of the Constitution of India.