New Delhi: The Union Cabinet today increased Dearness Allowance (DA) and Dearness Relief (DR) by 3 per cent to 34 per cent to benefit over 1.16 crore Central government employees and pensioners across the country.
At a meeting chaired by Prime Minister Narendra Modi, the Cabinet approved the amount that would lead to an increase of 3 per cent over the existing rate of 31 per cent of basic pay or pension with effect from 1 January, to ‘compensate for price rise’, a government statement said.
It added: ‘This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission. 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.’
Dearness Allowance is a component of salary of central government employees particularly aimed at giving them relief from the impact of inflation. Dearness Relief is what is given to pensioners.