Cabinet approves 4% dearness allowance hike for Central govt employees

The benefit will come into effect from January 1, 2024 and will cost the exchequer Rs 12,868.72 crore per annum.

Union Minister Piyush Goyal told reporters that the move will benefit 49.18 lakh employees and 67.95 lakh pensioners. (Source: X/@PIB_India)

The Union Cabinet on Thursday approved a four percent hike in dearness allowance for central government employees and dearness relief for pensioners.

Union Minister Piyush Goyal told reporters that the move will benefit 49.18 lakh employees and 67.95 lakh pensioners. The hike has been announced to compensate against price rise.

The benefit will come into effect from January 1, 2024 and will cost the exchequer Rs 12,868.72 crore per annum. The impact would be Rs 15,014 crore during the year 2024-25 (January 2024 to February 2025).

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With the increase in DA, transport allowance, canteen allowance, and deputation allowance among others have been increased by 25 percent. House Rent Allowance has been raised from 27 percent, 19 percent and 9 percent of basic pay to 30 percent, 20 percent and 10 percent, respectively.

Benefits under gratuity have been increased by 25 percent with an increase ceiling of Rs 25 lakh from the existing Rs 20 lakh.

The burden on the exchequer due to an increase in various allowances would be Rs 9,400 crore annually.

#WATCH | Union Cabinet approves hike in Dearness Allowance to govt employees and Dearness Relief to pensioners by 4% from January 1, 2024, announces Union Minister Piyush Goyal. pic.twitter.com/IsWUnwBGHW

— ANI (@ANI) March 7, 2024

In October last year, the government had hiked the dearness allowance and dearness relief by four percent to 46 percent, a move that cost the exchequer Rs 12,857 crore per annum.

With inputs from PTI