NewDelhi : In what could be a Diwali Bonanza for the central government employees and Pensioners, the Union Cabinet Chaired by Prime Minister Narendra Modi on Wednesday approved 5% increase in Dearness Allowance (DA)/Dearness Relief(DR). With this increase the total DA/DR will reach 17% of the Basic pay/Pension, to compensate for price rise. This hike will be applicable from 1st of July this year, Union Minister Prakash Javdekar said.
This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission.
Dear Allowance/Dearness Relief is paid to Central Government employees/pensioners to adjust the cost of living and to protect their basic pay/pension from erosion in the real value. Dear Allowance/Dearness Relief is revised twice a year from 1st January and 1st July.
The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be Rs. 15909.35 crore per annum and Rs. 10606.20 crore in the financial year 2019-20 (for a period of 08 months from July, 2019 to February, 2020). This will benefit about 49.93 lakh Central Government employees and 65.26 lakh pensioners.