NEW DELHI, July 14: In a major relief to the central government employees and pensioners, the Union Cabinet headed by Prime Minister Narendra Modi on Wednesday approved a steep 11 per cent hike in Dearness Allowance (DA) and Dearness Relief (DR) from the present 17 per cent to 28 per cent of their basic pay, the union information minister Anurag Thakur announced.
The hike in DA and DR rates will be effective from the current month, July 1, 2021, the minister said adding that the decision would benefit 48.34 lakh central government employees and 65.26 lakh government pensioners.
“The DA rate which was 17 per cent earlier, has been risen by 11 per cent to 28 per cent,” the minister said.
Till now, central government employees use to get DA at 17 per cent of their basic salary. Last year, the Cabinet had approved a 4 per cent hike in DA for central employees, which was supposed to be effective from January 1, 2021. However, in April 2020, the increment was stalled due to the pandemic.
The rise in the rate of DA and DR will have an additional annual burden of around Rs 34,401 crore on the exchequer, Thakur said.
The DA and DR installments are due for four periods namely January 1, 2020, July 1, 2020, January 1, 2021, and July 1, 2021.
However, Thakur said the rate of DA and DR from January 1, 2020 to June 30, 2021 would remain at 17 per cent.
“The rate of dearness allowance and dearness relief for the period 1st Jan 2020 to 30 Jun 2021 shall remain 17 per cent,” he said.
(Manas Dasgupta)