Odisha Chief Minister Mohan Charan Majhi, on Friday, announced a 2% increase in Dearness Allowance (DA) for employees of state-run Public Sector Undertakings (PSUs).
According to a press release, the DA has been increased from 53% to 55% of their basic salary. The decision is set to benefit approximately 8.5 lakh employees and pensioners, including those working in PSUs.
The increased DA will be disbursed in cash along with the salary, including any back pay for previous months. The enhanced DA will be effective retrospectively from January 1.
The move is done to help employees cope with rising prices of goods and services. The main purpose is to reduce the financial burden on state employees caused by rising living costs and enhance the purchasing power of its employees.
In addition to this, a 2% increase in Dearness Relief, also known as a temporary increase (TI), has been announced for Odisha government pensioners.
The hike benefits thousands of pensioners and their families. Employee and pensioner associations have welcomed the move, calling it a positive step toward financial security.
What is Dearness Allowance (DA)?
Dearness Allowance (DA) is an additional payment made to government employees, public sector employees, and pensioners to offset the impact of inflation. It is calculated as a percentage of the basic salary or pension.
If a government employee has a basic salary of ₹ 40,000 and the DA is 55%, the DA portion is ₹ 40,000 x 0.55, which is equal to ₹ 22,000. The total salary would be ₹ 40,000 plus ₹ 22,000, which is equal to ₹ 62,000.
DA is revised periodically, usually every six months or once a year, based on changes in inflation. The main purpose of DA is to maintain the purchasing power of employees and pensioners, so they can manage everyday expenses.