The government’s decision to raise the Dearness Allowance by 4% to 50% has resulted in a substantial increase in various allowances, including retirement benefits and gratuity, providing significant advantages to certain government employees.

The enhanced Death Cum Retirement Gratuity (DCRG) limit applies to BSNL and MTNL employees governed by Rule 37 of the CCS (Pension) Rules, 2021. The government has raised the maximum gratuity limit for BSNL and MTNL employees who chose a pension under the combined service framework, increasing it from Rs 20 lakh to Rs 25 lakh. This change, effective from January 1, 2024, aligns with the recent hike in the Dearness Allowance (DA) to 50%. According to the guidelines, all allowances are revised upward by 25% when the Dearness Allowance (DA) reaches 50% of the basic pay for central government employees. In line with these rules, the Centre has also announced an increase in the retirement gratuity limit along with the hike in various allowances.

Following the Centre’s decision to increase its employees’ Dearness Allowance to 50%, there has been a significant revision in other allowances, including retirement gratuity. After the DA reached 50% of the basic salary, the Department of Pension and Pensioner’s Welfare (DoPPW) issued a notification on May 30, raising the gratuity limit for central government employees from Rs 20 lakh to Rs 25 lakh. The hike is effective from January 1, 2024.