The Union Cabinet on Wednesday cleared a 4 per cent Dearness Allowance (DA) and Dearness Relief (DR) hike for central government employees and pensioners.
With this decision, the DA for central government employees will increase to 46 per cent from the existing 42 per cent.
Union Minister Anurag Thakur said the release of the additional installment of dearness allowance and dearness relief will be applicable from July 01, 2023.
Thakur said the 4% DA and DR hike would cost the government Rs 12,857 crore annually.
The long-awaited decision comes during the ongoing festive season and is being touted as a ‘Diwali gift’ for lakhs of central government employees and pensioners.
The decision will have a positive impact on 48.67 lakh central government employees and 67.95 lakh pensioners.
This is because central government employees will get enhanced salaries from the month of November along with arrears for the period between July and October.
4% DA hike impact on salary
For those with a minimum basic salary set at Rs 18,000, their current 42 per cent DA results in an additional monthly income of Rs 7,560.
At 46 percent DA, their monthly salary increase jumps to Rs 8,280.
Meanwhile, individuals with a maximum basic salary of Rs 56,900, who currently enjoy the advantages of a 42 percent DA, are presently receiving Rs 23,898 as part of their monthly earnings.
At 46 per cent, these individuals will see their monthly earnings surging to Rs 26,174.
What is DA and DR?
The DA functions as a cost-of-living adjustment allowance extended to the government’s committed workforce.
In a parallel capacity, Dearness Relief (DR) serves central government pensioners, offering the means to manage the escalating cost of living. The government revises the rates of DA and DR every six months.