The centre on Tuesday announced a 1 percentage point hike in dearness allowance (DA) and dearness relief (DR) to 5 per cent, benefiting 48.85 central government employees and 5.55 million pensioners.
The union cabinet chaired by Prime Minister Narendra Modi has given its approval for release of additional 1 per cent dearness allowance (DA) to central government employees and dearness relief (DR) to pensioners effective a July 2017.
The release of the additional instalment of DA represents an increase of 1 percentage point over the existing rate of 4 per cent of the basic pay or pension as the case may be.
The hike is meant to compensate for price rise and is in accordance with the accepted formula recommended by the 7th Central Pay Commission.
The combined impact on the exchequer on account of both DA and DR would be Rs3,068.26 crore per annum and Rs2,045.50 crore in the financial year 2017-18 (for a period of 8 months from July 2017 to February 2018). This will benefit about 4.93vmillion central government employees and 6.12 million pensioners.