Central government employees have received encouraging news as the Dearness Allowance (DA) saw a 4% increase in February, bringing the total DA to 50%. The new rates of DA will be applicable from January to June 2024. With the rise in DA, changes have also been made to six different allowances for central government employees. Additionally, there is an expected 3% increase in House Rent Allowance (HRA) following the hike in DA, which will result in HRA increasing from 27% to 30%.
HRA Categorization Based on City Population: X, Y, and Z Categories
The HRA is categorized into three categories based on the city of employment: X, Y, and Z. Cities with a population exceeding 50 lakhs fall under the X category, those with a population between 5 lakhs and 50 lakhs fall under the Y category, and those with a population less than 5 lakhs fall under the Z category. The minimum HRA for these categories will be 5400, 3600, and 1800 INR respectively.
Currently, employees in the X category receive HRA at a rate of 27% of their basic salary, while those in the Y and Z categories receive it at rates of 18-20% and 9-10% respectively. With the DA reaching 50%, these rates are expected to increase to 30%, 20%, and 10% respectively.
The increase in HRA will result in a monthly salary increment of 500 to 1000 INR, with an annual increase of up to 12,000 INR. Additionally, changes have been made to other allowances such as Dearness Relief, Child Education Allowance, Risk Allowance, Overtime Allowance, Night Duty Allowance, and Special Allowance, following a 4% hike in Dearness Relief and Dearness Allowance. An official memorandum was issued by the Department of Personnel and Training on April 2, 2024, outlining these changes.