Cabinet Approves 3% DA Hike For Central Government Employees

Story Highlights
  • Cabinet approves 3% DA, DR hike.
  • DA will increase to 31% of the basic salary of an employee.
  • Exchequer will bear Rs 9,488.70 cr annually.

New Delhi: The Union Cabinet approved a 3% increase in Dearness Allowance (DA) Dearness Relief (DR) for central government employees and pensioners, which was previously set at 28%. The DA will rise to 31% as a result of this increase. Employees’ DA is always computed as a proportion of their base income. This is then added to the basic salary, along with other components of the salary, which further makes up the total salary of an employee. Because of the COVID-19 epidemic, the DA hike was halted in 2020 for the period January 2020 to June 2021.

Prime Minister Narendra Modi’s government at the Centre agreed in July 2021 to increase the Dearness Allowance (DA) and Dearness Relief (DR) granted to government employees and pensioners to 28 % from 17 %, respectively. The new DA and DR rates went into effect on July 1st and benefitted around 48.34 lakh central government employees and 65.26 lakh pensioners. The yearly cost of the DA increase for central government employees is expected to be around Rs. 9,488.70 crore.

The DA increase, on the other hand, was not retroactive, which left central government employees who retired between January 2020 and June 2021 perplexed about the DA rate that would apply to their gratuity, leave encashment, and other retirement benefits.

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