New Delhi: The central government is likely to increase the dearness allowance (DA) for its over one crore employees and pensioners by four percentage points to 42 per cent from the existing 38 per cent as per the agreed formula. The dearness allowance for employees and pensioners is worked out on the basis of the latest Consumer Price Index for Industrial Workers (CPI-IW) brought out by the Labour Bureau every month. The Labour Bureau is a wing of the Labour Ministry. Talking to PTI, All India Railwaymen Federation, General Secretary, Shiva Gopal Mishra said, “The CPI-IW for December 2022 was released on January 31, 2023. The dearness allowance hike works out to be 4.23 per cent. But the government does not factor in hiking DA beyond the decimal point. Thus DA is likely to be increased by four percentage points to 42 per cent.” He further explained that the Finance Ministry’s expenditure department will formulate a proposal to hike DA along with its revenue implication and will put up the proposal before the Union Cabinet for approval. The DA hike will be effective from January 1, 2023. Presently over one crore central government employees and pensioners are getting 38 per cent dearness allowance. The last revision in DA was done on September 28, 2022, effective from July 1, 2022. The Centre had increased DA by four percentage points to 38 per cent based on the percentage increase in 12 monthly averages of the All India Consumer Price Index for the period ending June 2022. The DA is provided to employees and pensioners to compensate them for rising prices. The cost of living increases over a period of time and is reflected through CPI-IW. The allowance is revised periodically twice a year.