New Delhi, Sep 12, 2017 : Ahead of Dussehra festivities, the Centre Tuesday increased Dearness Allowance for its employees and pensioners by 1% bringing it to a total of 5% with effect from July one. The move will benefit 49.26 lakh Central Government employees and 61.17 lakh pensioners.
“The Union Cabinet chaired by the Prime Minister Narendra Modi has given its approval for release of additional 1% DA to Central government employees and Dearness Relief (DR) to pensioners. It will be applicable from 01.07.2017. The release of the additional instalment of DA represents an increase of 1% over the existing rate of 4% of the basic pay/pension, to compensate for price rise. This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission,” an official statement said.
The dearness allowance is paid as the proportion of the basic pay of the central government employees. The combined impact on the exchequer on account of both DA and DR would be Rs 3,068.26 crore per annum and Rs 2,045.50 crore in the financial year 2017-18 (for a period of 8 months from July, 2017 to February, 2018).
The hike in the DA/DR is as per the agreed methodology of taking an average of Consumer Price Index-Industrial Workers for the past 12 months.