The Indian Cabinet has approved a 4% increase in Dearness Allowance for Central Government employees and Dearness Relief for Pensioners, effective from January 2023. This increase is to combat rising prices and will bring the existing rate of 38% of Basic Pay/Pension up to 42%. The combined impact on the exchequer will be Rs. 12,815.60 crore per annum. Over 47.58 lakh Central Government employees and 69.76 lakh pensioners will benefit from this decision, which was made as per the recommendations of the 7th Central Pay Commission.
42% DA/DR from January 2023!
According to a press release issued by the Labour Bureau in November 2022, the level of the All-India Consumer Price Index for Industrial Workers (CPI-IW) did not change from the previous month. As a direct result of this, the Dearness Allowance for January 2023 has reached its conclusion stage! According to the Seventh Central Pay Commission, the data from this month’s CPI-IW indicate a 4% growth, which will result in a 42% increase in DA/DR for Central Government Employees and Pensioners. These numbers were determined based on the data from this month’s CPI-IW. Only in the event that the AICPIN index for the month of December 2022 will increase by more than 7 points or decrease by more than 5 points from the current level will the prediction of ‘Expected DA from January 2023’ be subject to modification! Aside from that, the Dearness Allowance (DA) of 42% beginning in January 2023 is virtually guaranteed!
| M/Y | AICPIN 2016 | AICPIN 2001 | DA% |
| July 2022 | 129.9 | 374 | 39.03 |
| August 2022 | 130.2 | 375 | 39.70 |
| September 2022 | 131.3 | 378 | 40.43 |
| October 2022 | 132.5 | 382 | 41.13 |
| November 2022 | 132.5 | 382 | 41.77 |
| December 2022 | 132.5 | 382 | 42.44 |
If the AICPIN index number for the month of December will be 132.5, the additional DA/DR for Central Government employees, pensioners, and family pensioners will be 4%! The total DA/DR will move up to 42%!