The central government has increased dearness allowance for employees and pensioners by 3%. The decision on DA increase was taken in the cabinet meeting held on Tuesday 28 October. This increase will increase the dearness allowance from 60% to 63% before the implementation of the 8th Pay Commission. This will benefit approximately 48 lakh employees and 68 lakh pensioners. The new rates will be considered effective from July 1. DA was increased by 2% in April, now it has increased from 60% to 63%. Earlier in the month of April, the government had increased the DA of employees and Dearness Relief (DR) for pensioners by 2 percent. With that increase the DA rate reached 60%. Now after the latest increase of 3 percent, this figure has increased to 63 percent. With this decision of the government, employees and pensioners will get direct financial benefits during the festive season and the arrears of the previous months will also be credited to their accounts. How much impact will it have on the salary of employees? Due to increase in DA, the direct increase in salary is decided on the basis of basic pay. The allowance is revised twice a year. The Central Government revises DA and DR twice every year for employees and pensioners. The first amendment usually comes into effect from January and the second from July. This latest announcement has been made for the July half. The government estimates inflation based on All India Consumer Price Index (AICPI-IW) data and decides to increase the allowances in the same proportion. Dearness Allowance (DA) is an allowance given to balance the living expenses of government employees. It is decided as a percentage of the employee’s basic salary. At the same time, Dearness Relief (DR) is a similar benefit which is given to retired employees i.e. pensioners on their basic pension. Its main objective is to reduce the impact of rising inflation and rising prices of everyday items.
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Central government increased dearness allowance by 3% to 63%: 48 lakh central employees and 68 lakh pensioners will benefit.
