NEW DELHI: The Union Cabinet on Wednesday approved 3 per cent hike in dearness allowance (DA) for central government employees and dearness relief (DR) to pensioners.
With this, DA for such employees now stands at 34 per cent of the basic pay/pension as against 31 per cent earlier.
The hike will be applicable with effect from January 1, 2022.
“This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission,” the government said in an official release.
The combined impact on the exchequer on account of both DA and DR would be Rs 9,544.50 crore per annum.
“This will benefit about 47.68 lakh central government employees and 68.62 lakh pensioners,” the release said.
In October last year, the Centre had increased DA from 28 per cent to 31 per cent. It was the 2nd raise in a year as DA rates were hiked from 17 per cent to 28 per cent after almost a year long gap in July 2021.
In wake of the Covid-19 pandemic, the Centre had frozen three additional instalments of the DA and DR which were due from January 1, 2020, July 1, 2020 and January 1, 2021.