What to expect in the next DA Hike?
The Dearness Allowance to touch 56% Jan 2025
This month is the deadline for the upcoming modification of the central government employees’ dearness allowance (DA). However, as has happened multiple times in the past due to a delay in the release of the All-India Consumer Price Index for Industrial Workers (AICPI-IW) data, the announcement is most likely to be made in the first week of March.
The November 2024 AICPI data has been made public by the Labour Ministry. The DA increased by 3%, according to the All-India CPI-IW statistics for the month, which was steady at 144.5 points. This implies that, starting in January 2025, the adjustment would increase the DA/DR rate to 56%.
There are two conceivable outcomes for the DA modification based on the stationary CPI-IW index in November. The DA rate may fall to 55% if the December 2024 index falls by 0.6 points or more. However, the projected DA rate will remain constant at 56% if the index shifts by up to 0.5 points in any way.
In the meantime, as part of the regular pre-Budget meeting, labor union representatives recently met with Union Finance Minister Nirmala Sitharaman. The 8th Pay Commission, which will make recommendations on compensation and pension changes for central government employees and pensioners, was asked by employee unions to be announced during the meeting.
Based on historical patterns, which indicate that the government typically establishes a pay commission every ten years, employee unions have stated that the eighth pay commission will be put into effect on January 1, 2026.
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