The central government has raised the dearness allowance (DA) and dearness relief (DR) for its over a crore employees and pensioners by 3 per cent to compensate them against price rise. This takes the total from 50 per cent to 53 per cent, to be paid over and above the basic pay. The hike in DA rate was decided at a cabinet meeting chaired by Prime Minister Narendra Modi this morning.
The new rate will be effective from July 1, 2024. The decision, taken weeks ahead of Diwali, comes as a major relief to central government employees amid the festive season.
"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 a statement.
The hike in DA and DR will cost the exchequer an additional Rs 9,448.35 crore every year and benefit about 49.18 lakh central government employees and 64.89 lakh pensioners, the government said.
DA is given to government employees and DR to pensioners to compensate them for increasing prices. Revised periodically twice a year, this allowance is calculated on the basis of the latest consumer price index for industrial workers.
