Calculation of Dearness AllowanceĪs DA is provided to employees to protect against the price rise in a particular financial year, it is calculated twice every year – in January and July. Thus, DA varies from employee to employee based on their presence in the urban, semi-urban or rural sector. It, therefore, becomes essential for the government to shield its employees from the adverse effects of inflation.As the impact of inflation varies according to the location of the employee, dearness allowance is calculated accordingly. The effective salary of government employees requires constant enhancement to help them cope up with the increasing prices.Despite several measures by the government to control the rate of inflation, only partial success has been achieved because the prices move according to the market. Dearness Allowance is paid by the government to its employees as well as a pensioner to offset the impact of inflation.
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