The Union Cabinet headed by Prime Minister Narendra Modi has approved a hike of 3 percent in the Dearness Allowance (DA) and Dearness Relief for the central government employees and pensioners resectively. The raised DA and DR will be effective retrospectively from January 2022.
The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi, has given its approval to release an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 01.01.2022 representing an increase of 3 per cent over the existing rate of 31 per cent of the Basic Pay/Pension, to compensate for price rise, the Union Cabinet mentioned in a release.
The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be Rs 9,544.50 crore per annum, it further said.
The latest hike pushes the DA to 34 percent of the basic salary which is aimed toward benefiting 47.68 lakh government employees. Similarly. the raise in the DR is likely to benefit more than 68.62 lakh pensioners amid rising prices of fuel and surging inflation.
The Centre raised the DA for the central government employees and pensioners to 28 percent from 17 percent in July 2021 after more than one-and-half years of stalling it due to the Coronavirus pandemic.
The government also hiked the DA again by 3 percent to take it to 31 percent in October 2021.
Dearness Allowance, a part of the salary of government employees and pensioners is aimed at giving relief from the impact of inflation. For the unversed, the government revises DA twice every year -- in January and July.
The DA, however, differs from one employee to another based on where the place and type of work -- urban, semi-urban or rural sector. Notably, as the dearness allowance is linked to the basic salary, a hike in DA will also consequently raise the monthly provident fund (PF) and gratuity amount of the central government employees.