Govt staff, pensioners to get higher dearness allowance and dearness relief

The government today approved a hike in the dearness allowance to central government employees and dearness relief to pensioners with effect from 1 July 2021 to 28 per cent, from the existing 17 per cent, entailing an additional annual expenditure of Rs34,400 crore.

The decision by the union cabinet chaired by Prime Minister Narendra Modi would benefit 5 million central government employees and 6.1 million pensioners. 
DA and DR are paid by the government to its employees and pensioners respectively to compensate them for the increase in the cost of living on account of inflation. It is revised twice a year, on 1 January and 1 July. 
In view of the unprecedented situation arising from the SARS-CoV-2 pandemic, three additional instalments of DA to central government employees and DR to pensioners, which were due from 1 January 2020, 1 July 2020 and 1 January 2021, remained frozen.
The pending three instalments of DA included 4 per cent for the January- June 2020, 3 per cent for the July- December 2020 period and 4 per cent for the January-June 2021 period.
The government has now decided to increase the DA to central staff and DR to pensioners with effect from 1 July 2021 to 28 per cent, representing an increase of 11 per cent over the existing rate of 17 per ent of the basic pay/pension. The increase reflects the pending three instalments. 
The rate of DA/DR for the period 1 January 2020 to 30 June 2021 will remain 17 per cent and hence no arrears will be paid to the employees and pensioners as was the case earlier. 
Non-payment of arrears will be a big loss for the employees and pensioners as they would lose on retirement benefits and pension, which are both linked to pay scales.