In a much awaited decision which will benefit lakhs of government employees across the country, the Finance Ministry on Tuesday issued an order to implement the Union Cabinet’s decision to hike Dearness Allowance (DA) for Central government employees to 28 per cent from July 1.
It is pertinent to mention here that the Cabinet had approved 11 per cent point hike in Dearness Allowance (DA) and Dearness Relief (DR) for Central government employees and pensioners with effect from July 1, 2021.
The move is expected to benefit more than 48 lakh Central government employees, and 65 lakh pensioners. With this, the new DA rate will be 28 per cent, up from the earlier 17 per cent.
In an office memorandum, the Finance Ministry said that the term ‘basic pay’ in the revised pay structure means pay drawn in the prescribed level in the pay matrix as per 7th CPC recommendations accepted by the government, but does not include any other type of pay like special pay, etc.
The Department of Expenditure under the Finance Ministry said the DA payable to Central government employees shall be enhanced from the existing rate of 17 per cent to 28 per cent of basic pay.
The increase subsumes the additional installments arising on January 1, 2020, July 1, 2020, and January 1, 2021.
In April last year, the Finance Ministry had put on hold an increment in dearness allowance (DA) till June 30, 2021, due to the COVID-19 pandemic situation.
The rate of DA from January 1, 2020, to June 30, 2021, was 17 per cent. "
These orders shall also apply to the civilian employees paid from the Defence Services Estimates and the expenditure will be chargeable to the relevant head of the Defence Services Estimates. In respect of Armed Forces personnel and Railway employees, separate orders will be issued by the respective ministries,” it added.