What is the purpose of dearness allowance?

Dearness Allowance (DA) is a cost of living adjustment that is provided to employees, particularly in government and public sector jobs, to mitigate the impact of inflation on their purchasing power. It is typically calculated as a percentage of the basic salary and is intended to help employees maintain their standard of living amidst rising prices. The DA is periodically revised based on changes in the Consumer Price Index, ensuring that it reflects current economic conditions.