The Union Cabinet on Thursday approved 2 per cent dearness allowance and relief benefitting about 50.68 lakh employees and 54.24 lakh pensioners. The decision to provide 2 per cent dearness allowance on basic pay will be effective from July 1, 2016.
The increase in dearness allowance and relief will result in annual expense of Rs 5,622.10 crore. For the eight months of this financial year 2016-17 (July-February), it would be Rs 3,748.06 crore.
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The Central government had increased DA by 6 per cent to 125 per cent in March this year and it was later merged with basic pay following the implementation of Seventh Pay Commission.
“The Union Cabinet has given its approval to release an instalment of DA to Central Government employees and Dearness Relief (DR) to Pensioners from July 1, 2016 representing an increase of 2 per cent of the revised Basic Pay/Pension, to compensate for price rise,” an official release said.
“The increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission,” it said.