The Union Cabinet on Thursday approved a hike of 3 per cent in dearness allowance (DA) for central government employees and dearness relief (DR) for pensioners over the existing rate of 28 per cent of the basic pay/pension.
The decision was taken in the meeting of the Union Cabinet, chaired by Prime Minister Narendra Modi.
The new rates of DA and DR will be effective from July 1.
Briefing the media, Union Information and Broadcasting Minister Anurag Thakur said that the decision will benefit 47.14 lakh Central government employees and 68.62 lakh pensioners. He said approval was given for restoring three arrear instalments of DA In July this year, and the rate of DA was increased from 17 per cent to 28 per cent.
With a 3-per cent hike now, the DA rate will become 31 per cent, Thakur said.
In a statement, the government said, “This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission. The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be Rs.9,488.70 crore per annum.”
Following the outbreak of Covid-19 pandemic, three additional instalments of DA to Central government employees and DR to pensioners — which were due from January 1, 2020, July 1, 2020, and January 1, 2021 — had been frozen. A decision to release these instalments was taken in the Cabinet meeting on July 14, 2021.
The new rates of DA and DR will be effective from 1st July 2021.
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