The Ministry of Railways has instructed its zonal officials to pay allowances per the Union government’s decision to increase the Dearness Allowance of central employees from 31 percent to 34 percent.
As issued by the Ministry, dearness allowance will now be given with the effective revised rates. This decision will directly benefit approximately 14 lakh employees and pensioners. The revised rates are set to be paid by the end of this month.
The decision was communicated in a letter on behalf of Jai Kumar, Deputy Director, Railway Board to all the zones and production units on Tuesday.
This revision was stalled for a year and a half due to the pandemic. This move is expected to bring relief given the rising fuel and oil prices as well as inflation.
The Central government previously increased the DA and DR for the central government employees from 17 percent to 28 percent in July 2021. This was again repeated in the last hike in October 2021 when the central government employees witnessed a jump of 3 percent.
What is Dearness Allowance?
DA is a salary component for government employees and pensioners. Its purpose is to soothe the effects of rising inflation. The effective salary of a government employee is revised twice every year, in January and July.
DA varies from employee to employee and is at times determined by whether the employee works in an urban, semi-urban or rural sector.
How is DA calculated?
The formula to calculate the Dearness Allowance for central government employees and pensioners was changed in 2006 by the Union Government.
DA formula for Central government employees: Dearness Allowance % = ((Average of All-India Consumer Price Index (Base Year 2001=100) for the past 12 months -115.76)/115.76)*100.
DA formula for Central public sector employee: Dearness Allowance % = ((Average of All-India Consumer Price Index (Base Year 2001=100) for the past 3 months -126.33)/126.33)*100
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