New Delhi, July 5 -- The central government hiked dearness allowance (DA) by 2% in April, effectively taking the component to 60% of the basic pay for central government employees and pensioners, up from 58%. Revised twice a year based on the All-India Consumer Price Index (AICPI) formula as prescribed under the 7th central pay commission, DA aims to address rising cost-of-living due to inflation.

It impacts the monthly pay of central government employees, public sector staff, defence personnel, bank employees and retired pensioners aimed at mitigating rising inflation. Announcements are usually made in March and October, with rollouts scheduled in January and July. Notably, DA is not part of compensation for private sector workers.

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