CDA full form is Central Dearness Allowance and is a type of allowance for central government employees and pensioners in India in the form of CDA rates to counteract the impact of inflation on their purchasing power towards increased cost of goods and services.
CDA is similar to Industrial Dearness Allowance, which is applicable only for CPSEs as IDA Rates. However, CDA specifically applies to central government employees and is revised twice a year, in January and July. The current CDA rates are determined based on the Consumer Price Index (CPI), and the government periodically revises them to align with current economic conditions.
The primary purpose of the Central Dearness Allowance is to protect the real income of government employees and pensioners from the erosion caused by inflation. This CDA rate adjustment is a crucial aspect of compensation for central government workers. It is aimed at providing financial relief in response to inflationary pressures as per AICPIN, which helps to maintain their standard of living despite increases in the cost of living.
CDA Rates Calculation
CDA rate is calculated based on the All India Consumer Price Index for Industrial Workers (CPI-IW). The formula for calculating CDA is as follows:
CDA (%)=(Average of CPI for the last 12 months−Base Index)/Base Index)*100
Example Calculation
- Base Index: Suppose the base index is 261.42 (which is common for calculations based on a specific base year).
- Average CPI: Assume the average CPI for the last 12 months is 310.
Using the Formula
- CDA (%)=(310−261.42)/261.42)*100
- CDA (%)=18.58%
Key Points of CDA
- Biannual Revision: CDA rates are revised twice a year, in January and July, based on the CPI-IW data.
- Applicability: CDA applies to central government employees, such as Railway employees, postal employees, Defense personnel, and Pensioners.
- Impact on Salary: The revised CDA directly impacts the gross salary of employees and the pension of retired personnel.
Importance of CDA
CDA rates ensures that the salaries and pensions of Indian Central Government employees keep pace with inflation. It is a critical component of the salary structure for Central Government employees and a significant factor in financial planning for pensioners.
Current CDA Rates for 7th CPC CDA Scales
The current CDA rates for the 7th CPC scales in the below table have been adjusted to reflect updated pay structures, ensuring more accurate compensation for government employees. These rates take into account various factors to align with the latest pay revisions.
| From | Increase DA % | Total DA % |
|---|---|---|
| 1st January 2024 | 4 | 50 |
| 1st July 2023 | 4 | 46 |
| 1st January 2023 | 4 | 42 |
| 1st July 2022 | 4 | 38 |
| 1st January 2022 | 3 | 34 |
| 1st July 2021 | 3 | 31 |
| 1st January to 30 June 20 | 11 | 28 |
| 1st January 20 to 30th June 20 | DA Freezed | 17 |
| 1st July 2019 | 5 | 17 |
| 1st January 2019 | 12 | |
| 1st July 2018 | 9 | |
| 1st January 2018 | 7 |
CDA Rate for 6th CPC Pay Scales
The current CDA rates for the 6th CPC pay scales have been confidently updated to align with the revised compensation framework. These Central Dearness Allowance rate adjustments for 5th CPC scales assertively reflect changes in pay structures to better accommodate employee financial needs as mentioned.
| From | Increase DA % | Total DA % |
|---|---|---|
| 1st January 24 | 9 | 239 |
| 1st July 23 | 9 | 230 |
| 1st January 23 | 9 | 221 |
| 1st July 22 | 9 | 212 |
| 1st January 22 | 7 | 203 |
| 1st July 21 | 7 | 196 |
| 1st January 21 | — | 189 |
| 1st January 20 | 10 | 164 |
| 1st January 19 | 6 | 154 |
| 1st July 18 | 6 | 148 |
| 1st January 18 | 142 |
CDA Rates for 5th CPC Pay Scales
Employees can expect a revised pay scale with new allowance that better matches their roles and responsibilities, and these current CDA rates ensure that allowances are consistent with the existing pay scales as below
| From | DA Increase % | For CPSEs who have NOT allowed benefit of merger of 50% of DA | For CPSEs who have allowed benefit of merger of 50% of DA |
|---|---|---|---|
| 01.01.2024 | 16 | 493 | 443 |
| 01.07.2023 | 15 | 477 | 427 |
| 01.01.2023 | 16 | 462 | 412 |
| 01.07.2022 | 15 | 446 | 396 |
| 01.01.2022 | 13 | 431 | 381 |
| 01.07.2021 | 12 | 418 | 368 |
| 01.01.2021 | — | 406 | 356 |
| 01.07.2019 | 17 | 362 | 312 |
| 01.01.2019 | 11 | 345 | 295 |
| 01.07.2018 | 10 | 334 | 284 |
| 01.01.2018 | 324 | 274 |
The CDA rates may be calculated and issued the orders by the Department of Expenditure under the Ministry of Finance after announcing the monthly price index numbers.