The Union Cabinet on Thursday hiked dearness allowance and dearness relief by 3 per cent to 31 per cent, which will benefit about 47.14 lakh central government employees and 68.62 lakh pensioners. This was informed by Information & Broadcasting Minister Anurag Singh Thakur.
The Cabinet gave approval to release an additional instalment of dearness allowance (DA) to central government employees and dearness relief (DR) to pensioners with effect from July 1, 2021, representing a 3 per cent increase over the existing 28 per cent of the basic pay/pension, to compensate for price rise, an official release said.
The combined impact on the exchequer on account of both dearness allowance and dearness relief would be Rs 9,488.70 crore per annum.
This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission.
Earlier in July, the government had restored the dearness allowance and dearness relief and increased the rate of allowance from 17 per cent to 28 per cent.
Because of the COVID-19 pandemic, the central government had frozen the three additional instalments of the DA and DR, which were due from January 1, 2020, July 1, 2020, and January 1, 2021.