The Union Cabinet on Thursday (Oct 21) approved a three per cent hike in dearness allowance (DA) and dearness relief (DR) for central government employees and pensioners.
The hike will be retrospectively effective from July 1, 2021 representing an increase of 3% over the existing rate of 28% of the Basic Pay or Pension, to compensate for price rise.
With the hike, the rate of allowance has now increased to 31% from 28 percent. This increase is in accordance with the accepted formula, based on the recommendations of the 7th Central Pay Commission (CPC). The move is likely to benefit about 47.14 lakh Central government employees and 68.62 lakh pensioners.
The Cabinet has said that the decision’s impact on the exchequer will be Rs 9,488.70 crore per annum. Earlier in July, the government had reinstated the dearness allowance (DA) and dearness relief (DR) and increased the rate of allowance from 17% to 28%.