The government has hiked the dearness allowance (DA) for central government employees and dearness relief (DR) to pensioners to 28 per cent from 17 per cent with effect from July 1. The announcement comes as a major relief for central government employees and pensioners as both Dearness allowance and dearness relief was put on hold last year in the wake of the Covid-19 pandemic.
"The government has decided to increase the dearness allowance to central government employees and dearness relief to pensioners with effect from 01.07.2021 to 28 per cent, representing an increase of 11 per cent over the existing rate of 17 per cent of the basic pay / pension," the government said in a press release.
The decision is expected to cost the government approximately Rs 34,400 crore and impact around 48,34,000 central government employees and 65,26,000 pensioners, Anurag Thakur, the minister of sports, youth affairs and minister of information and broadcasting said in a press briefing while making the announcement.
Dearness allowance is paid by the government to its employees and dearness relief is given to the central government pensioners to compensate them for rising cost of living due to inflation.
NDTV had reported earlier, quoting sources that the cabinet was likely to clear dearness allowance at its meeting today so as to give a financial boost to the central government employees and pensioners ahead of the forthcoming festival season.