Good news for government employees. Before Holi, central employees, pensioners, and EPFO account holders might be in for two significant perks. Reports suggest that following tax breaks for salaried individuals, the central government could boost the dearness allowance for central employees and pensioners in March, along with raising interest rates on PF deposits for the 2024-25 financial year.
There’s buzz that the Modi government may raise the dearness allowance and relief for central employees and pensioners by 3% before Holi, bringing the new rates to 56%. This adjustment will be made under the 7th Pay Commission.
This change is set to benefit around 48 lakh central employees and 69 lakh pensioners. Additionally, there’s a possibility of increasing the interest rate on PF deposits for the financial year 2024-25, with an important meeting scheduled for February 28 to discuss this.
So, will the dearness allowance see a 3% hike in March?
The Central Government typically reviews the rates of Dearness Allowance and Dearness Relief for its employees and pensioners twice a year, based on the half-yearly data from the All India Consumer Price Index. These adjustments are usually made every January and July, with announcements expected around March and October.
Starting January 2025, the dearness allowance is set to rise, based on the AICPI index data collected from July to December 2024. Looking at the figures from July to November, the AICPI Index has hit 144.5, with a DA score of 55.05%. This suggests a guaranteed 3% increase in DA. We can expect the new rates to be revealed around Holi, and since they’ll take effect in January 2025, employees will also receive two months’ worth of arrears.
For instance, workers with a minimum salary of Rs 18,000 will see an increase of Rs 540 due to the 3% DA hike, while those at the top end earning Rs 2,50,000 will get an extra Rs 7,500. If someone currently receives a dearness allowance of Rs 15,000 a month, it will go up to Rs 15,450, giving them an additional Rs 450 each month. Pensioners will also gain from this, with their pensions potentially rising by Rs 270 to reach Rs 3,750.