Dearness Allowance (DA) is a cost of living adjustment allowance that is paid to government employees in India. It is intended to help employees cope with the rising cost of living and inflation. The allowance is calculated as a percentage of an employee’s basic pay and is typically reviewed and adjusted on a regular basis.
The calculation of DA is based on the Consumer Price Index (CPI) which is an indicator of the changes in the prices of goods and services consumed by people. The percentage of DA is linked to the percentage increase in the CPI and the percentage of DA is announced by the government on a half-yearly basis.
DA is usually paid along with the basic salary, HRA (House Rent Allowance) and other allowances like Transport Allowance, Medical Allowance, etc. It’s considered as an important part of the salary package for the government employees and it usually makes a significant portion of their salary.
DA is usually paid to employees of the Central Government, State Government, Local bodies, PSUs, Autonomous organisations and other organisations where the central government is a major stakeholder.
In summary, Dearness Allowance (DA) is a cost of living adjustment allowance paid to government employees in India to help them cope with the rising cost of living. It’s usually linked with the Consumer Price Index and paid along with the basic salary and other allowances.