Dearness Allowance (DA) is granted to Railway employees
- DA is granted to Railway employees to offset inflation and rising cost of living and inflation.
- Basis for DA calculation is All India consumer price index.
- DA revision is done to neutralise inflation 100%.
- Government will sanction DA on the first of January and on the first of July every year if it is due as per the calculation.
Dearness Pay (For those who retain Vth pay Commission scale)
- With effect from 1.1.2004 50% of DA was convertede to DP and DA was fixed as 11%.
- From that DA and other allowances were calculated based on Pay + DP resulting in financial benefit to employee and a temporary relief to employees who were waiting for next Pay Commission.
- Likewise for pensioners also 50% Dearness Relief was seperated as Dearness Pension from 1.1.2004 and DA was calculated on Pension + DP.
- This is still applicable for those who retain 5 th CPC scales.