Chhattisgarh Govt Announces DA Hike for State Employees | 18 Oct 2024

Recently, the Chhattisgarh government announced a 4% hike in Dearness Allowance (DA) for its employees ahead of Diwali.

DA Hike Details:
- The Chhattisgarh government increased DA by 4%, benefiting state employees and pensioners.
- This brings the total DA to 42% of the basic salary, aligning with the Seventh Pay Commission's recommendations.
Dearness Allowance (DA):
- It is the cost-of-living adjustment to offset inflation, provided to government employees and pensioners. It is calculated as a percentage of the basic salary.
Impact on Economy:
- Increased Consumer Spending: The hike boosts disposable income, especially around festive periods, spurring consumer demand.
- Inflation Control: DA helps employees manage inflation, but an increase in demand could potentially raise inflation if supply doesn’t keep pace.
- Fiscal Pressure: For the government, DA hikes increase expenditure, which may strain the fiscal budget but stimulate economic growth through consumption.

The Pay Commission is a body set up by the Central Government that reviews and recommends changes to the salary structure of employees.
The composition of the Pay Commission comes under the Department of Expenditure (Ministry of Finance).
Pay commissions are usually constituted every 10 years and the first pay commission was set up in 1946. Since Independence, a total of seven pay commissions have been formed.
The latest pay commission was set up in 2014 and its recommendations came into effect in 2016. Currently, central government employees and pensioners get salaries based on the recommendations of the 7^th pay commission.
It is not mandatory for the government to accept the recommendations of the pay commission. The government may choose to accept or reject the recommendations.