The Union Cabinet, led by Prime Minister Narendra Modi, has sanctioned a 2% increase in Dearness Allowance (DA) for Central Government employees and Dearness Relief (DR) for pensioners. Effective from January 1, 2025, this hike raises the DA and DR rates from 53% to 55% of basic pay or pension. This decision is expected to benefit around 48.66 lakh government employees and 66.55 lakh pensioners, imposing an annual financial burden of ₹6,614.04 crore on the exchequer.
Significance of the Govt Approved 2% DA Hike for Employees and Pensioners
The increase in DA and DR follows the standard formula recommended by the 7th Central Pay Commission. This revision aims to mitigate the impact of inflation and enhance financial security for government employees and retirees.
Union Information and Broadcasting Minister Ashwini Vaishnaw reiterated that the increase adheres to an established formula and will provide crucial support to millions of beneficiaries.
Trade Unions Oppose Amendments to CCS-Pension Rules Despite Govt Approving 2% DA Hike
While the DA and DR hike is a welcome relief, trade unions have voiced strong opposition to amendments in the Central Civil Service (CCS-Pension) Rules. The government’s decision to modify these rules through the Finance Bill, without consulting stakeholders, has sparked controversy.
Amarjeet Kaur, General Secretary of the All India Trade Union Congress (AITUC), criticized the amendments, arguing that they betray the interests of pensioners. She highlighted that the changes exclude existing pensioners from the benefits of the forthcoming 8th Pay Commission, limiting its impact to future retirees.
Calls for One Rank One Pension and Pension Parity Amid Govt Approved 2% DA Hike
The demand for One Rank One Pension (OROP) has been a longstanding issue among Armed Forces personnel. Similarly, civilian pensioners have been advocating for parity between past and future retirees. The 5th and 6th Central Pay Commissions had emphasized reducing the disparity among pensioners from different service periods.
Kaur further pointed out that these amendments contradict Supreme Court rulings that uphold pensioners’ rights. She asserted that all pensioners belong to a single category entitled to equal treatment under pension rules. Article 14 of the Indian Constitution guarantees equality before the law, reinforcing the principle of non-discriminatory policies.
Legal and Constitutional Concerns Over Pension Amendments Following Govt Approved 2% DA Hike
Trade unions argue that setting a cut-off date to categorize pensioners for differential benefits fails to meet the legal criteria for valid classification. This raises significant constitutional concerns and could lead to legal challenges.
Previous Supreme Court judgments have ruled in favor of pensioners in similar cases, affirming the principle of equitable treatment. Excluding existing pensioners from future pay commission benefits contradicts these legal precedents and may face scrutiny in the judiciary.
Financial Impact of the Govt Approved 2% DA Hike
The 2% DA and DR increment offers financial relief amid inflationary pressures but also increases the government’s fiscal responsibility. The additional ₹6,614.04 crore annual expenditure must be accommodated within existing budgetary limits.
While necessary to support employees and pensioners, this hike also highlights the ongoing challenge of sustaining competitive pay and pension structures in the public sector. The government must strike a balance between fiscal discipline and the welfare of its workforce.
Conclusion
The approval of the Govt Approved 2% DA Hike is a positive development for millions of government employees and pensioners. However, the controversy surrounding amendments to pension rules has ignited criticism from trade unions, raising concerns over fairness and constitutional validity.
Moving forward, the government must engage in transparent discussions with stakeholders to address pension-related grievances. The push for One Rank One Pension and equitable treatment between past and future pensioners remains a pressing issue. Ensuring financial stability while maintaining fairness in pension policies will require an inclusive and consultative approach.
As these developments unfold, it will be essential to observe how the government navigates these challenges while upholding the interests of employees and pensioners. While the Govt Approved 2% DA Hike provides immediate relief, a broader resolution of pension concerns is crucial for long-term policy stability.
