In a big relief to the salaried class in India, the Union government on Wednesday, March 30, announced a hike in the Dearness Allowance, or DA, for central government employees under the 7th Pay Commission. After the government’s latest move, DA will be hiked by 3 per cent, effective from January 1, 2022 The Dearness Relief for pensioners was also hiked by the government after a meeting of the Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi. The move will benefit around 47.68 lakh central government employees and 68.62 lakh pensioners amid rising fuel prices, oil prices and inflation in general.
“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 Cabinet mentioned.
“The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be Rs 9,544.50 crore per annum. This will benefit about 47.68 lakh central Government employees and 68.62 lakh pensioners,” it further said.
DA and DR hike was stalled for over one and a half years due to the Covid-19 pandemic as the government said that it was using the funds in upgrading healthcare infrastructure. The latest announcement came at a time when retail inflation in February rose to a eight-month high at 6.07 per cent.
In July last year, the Centre announced an 11 per cent Dearness Allowance and Dearness Relief rise for central government employees and pensioners, after which it rose from 17 per cent to 28 per cent. Later in October that year, the government hiked DA and DR again by 3 per cent, following which DA for the central government employees rose to 31 per cent. This came into effect from July 2021. On a similar note, the Dearness Relief for central government pensioners was also hiked at a rate of 31 per cent from the same time.
DA Hike Under 7th Pay Commission: How Much Salary to Increase?
This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission, the Cabinet said.
After the latest hike, central government employees will get a 34 per cent Dearness Allowance calculated by multiplying the current rate of DA by the base salary of the employee. If this calculation is done, the latest DA hike will result in an increase of the gross salary by up to Rs 20,000. Dearness Allowance or DA is the cost-of-living adjustment allowance that the government pays to offset the impact of inflation. It is paid to both public sector employees as well as pensioners.
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