New Delhi: The Union Cabinet has approved a 4 percent hike in Dearness Allowance (DA) for Central Government employees and pensioners, according to media reports. The announcement will benefit about 47.68 lakh Central Government employees and 68.62 lakh pensioners and is also applicable for civilian employees and those employed in defence services.
After today’s hike of 4 percent, the total DA paid to Central Government employees will reach 38 per cent. DA is a part of the salary which is calculated as a specific percentage of the basic salary which is then added to the basic salary. Since the effective date for the latest dearness announcement hike is July 1, the staff would be paid the arrears with their latest salaries.
The Central Government revises dearness allowance and dearness relief on January 1 and July 1 every year, but this decision is usually announced in March and September.
Previously, in March, the Cabinet had approved the proposal to increase the Dearness Allowance (DA) for Central Government employees and Dearness Relief (DR) for pensioners by 3 per cent to 34 per cent of the basic pay from 31 per cent previously, effective January 1, 2022. The government, at the time, paid employees three months in arrears.
Any changes to the dearness allowance are made as per the accepted formula, which is based on the recommendations of the 7th Pay Commission to compensate for the rise in prices. With retail inflation, or consumer price inflation, elevated above the upper-end of the Reserve Bank of India’s target range of 2-6 per cent each month, the DA was hiked by 4 per cent to 38 per cent of basic pay.
All those who are paid based on the 7th Pay Commission will get an increase of Rs 720 in DA on the basic salary of Rs 18,000, and this increase will be Rs 1,000 per month if the basic salary is 25,000. Similarly, those who were getting Rs 50,000 basic salary will now get a benefit of Rs 2,000 per month, and those with a basic salary of Rs 1,00,000 will get a benefit of Rs 4,000 in total salary after the 4 per cent increase in dearness allowance.
The grant of Dearness Relief (DR) to Central Government pensioners and family pensioners will also be applicable at the same revised rate, as it has been fixed for the employees, from July 1. The pension disbursing authorities, including the nationalized banks, will calculate the quantum of DR payable to each pensioner as per the individual case.
The revised rates will be applicable to central government pensioners, civilian central government pensioners/family pensioners, the armed forces pensioners, civilian pensioners paid out of the defence service, all India service pensioners, railway pensioners/family pensioners, and pensioners who are in receipt of provisional pension.