The Union Cabinet announced on Wednesday, October 16, a hike of 3 percentage points in the Dearness Allowance (DA) for Central government employees and Dearness Relief (DR) for pensioners. However, a top official from the Confederation Of Central Government Employees & Workers alleged that there were problems in manner and timeframe in which the hike was announced.

The confederation's Secretary General RN Parashar told Business Times over the phone that the announcement was delayed by several weeks. He added that the hike amount was also lower than expected because the formula to calculate it had been manipulated.

DA hike to benefit 49.18 lakh employees

The Union Cabinet announced the DA and DR hike - ostensibly for Diwali - in an official statement dated Wednesday. It said the decision was taken in a Cabinet meeting chaired by Prime Minister Narendra Modi.

According to the statement, the DA and DR had been hiked from 50 percent to 53 percent — a rise of 3 percentage points. It added that the increase would be applied retroactively, coming into effect from July 1.

It also claimed that the move would benefit about 49.18 lakh Central government employees and 64.89 lakh pensioners.

According to the statement: "The combined impact on the exchequer on account of both DA and DR would be Rs 9,448.35 crore per annum."

It added: "This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission."

The contentions

Parashar was quick to point out that first of all, the hike announcement was "abnormally delayed" - by almost a month.

"The announcement usually comes in the second week of September. This time, it has come in the second week of October," he told Business Times.

The Union leader also alleged that the Central government had "manipulated" the aforementioned pay-panel formula.

"The base year was changed," he said, explaining that this resulted in the reduction in the quantum of the hike.

Parashar also said that the Union government had delayed 18 months' arrears for Central government employees.

The period in question was when the country had been shut down — sometimes partially and other times entirely — during the Covid-19 pandemic that spread across the world in 2020-beginning.

Hike nevertheless welcome

However, it was not as if the DA increase was entirely unwelcome: An Andhra Pradesh-based college-level Central government employee was grateful for it.

Sri Krishnadevaraya University's Rakesh VT told Business Times that the DA increase would provide "significant financial relief" to Central government employees and pensioners.

An assistant professor with the university's Department of Journalism and Mass Communication, Rakesh said that the DA and DR hike would definitely lighten the inflation-inflicted burden for them.

He, however, also said that such hikes come late — in the form of arrears, often as much as four months after they are announced.