Andhra Pradesh raises DA to 41.86%: how much will employees get, and when? | Explained

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The Andhra Pradesh Secretariat at Velagapudi. | Photo Credit: Ch. Vijaya Bhaskar

The Andhra Pradesh government’s decision to sanction two long-pending Dearness Allowance (DA) instalments is set to provide relief to nearly five lakh government employees, teachers, university faculty and local body personnel. G.O. Ms. No. 119 and G.O. Ms. No. 120 together provide for a 4.55 percentage point increase in DA for employees covered by the Revised Pay Scales (RPS) 2022, taking the total DA from 37.31% to 41.86% of basic pay.

When will employees see the increase?

The enhanced DA will be reflected in salaries from the September pay cycle, paid at the beginning of October. The benefit has also been extended, as applicable, to higher education teaching staff drawing salaries under the University Grants Commission (UGC) and All India Council for Technical Education (AICTE) scales.

What do terms such as “1/19 DA” or “1/25 DA” mean?

For those unfamiliar with government payroll terminology, references such as 1/19 DA, 7/19 DA or 1/25 DA identify the month and year from which a particular DA instalment is applicable. The first figure denotes the month (1 for January and 7 for July), and the other figures indicate the year. Thus, 1/19 DA means DA applicable from January 2019, and 1/25 DA refers to January 2025. Since DA is generally revised twice a year to compensate employees for the impact of inflation, several such instalments can accumulate when their release is delayed.

The latest orders relate to two such pending revisions. The first increases the DA by 2.73 percentage points with effect from July 1, 2024, and the second provides another 1.82 percentage points from January 1, 2025. Together, they take the DA rate to 41.86%.

The immediate benefit is an increase in monthly salary, because DA is calculated as a percentage of basic pay. But the more significant financial component for many employees is the accumulated arrears for the period during which the revised DA was due but had not been paid.

The government has decided to clear these arrears through a phased mechanism extending into 2027 and 2028, rather than releasing the entire liability at one time. The amount due to an individual employee will depend mainly on the basic pay and the period for which arrears have accumulated. The arrear benefit cited for different salary levels ranges from about ₹1.23 lakh for a basic pay of ₹20,000 to about ₹11.07 lakh for a basic pay of ₹1.79 lakh.

The method of settling the arrears will differ according to the pension scheme. For employees covered by the Old Pension Scheme, the arrears will be credited to their General Provident Fund accounts. For employees under the Contributory Pension Scheme, 10% of the arrears will be credited to their pension or Permanent Retirement Account Number (PRAN) accounts, and the remaining 90% will be paid in cash according to the prescribed schedule. Special provisions have also been made for employees retiring during the specified period between 2025 and late 2027, enabling them to receive their eligible arrear balance as a lump sum at retirement, subject to the conditions in the orders.

The latest DA orders have two separate financial implications for employees. The revised 41.86% DA provides a continuing increase in monthly salary, and the arrears are the payment of amounts that accumulated because the instalments were released late. The higher salary components may also affect certain retirement-related calculations, including pension, gratuity, leave encashment and provident fund, wherever applicable under the relevant service rules. The phased settlement of arrears is intended to spread the financial burden on the State exchequer while allowing employees to receive the enhanced DA in their regular salaries.

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