The Union Cabinet on Friday approved 4 per cent increase in dearness allowances (DA) for government employees and pensioners to 21 per cent, which will benefit over 1.13 crore people.
The move will come into effect retrospectively from January1, 2020.
The Union Cabinet, chaired by Prime Minister Narendra Modi,has approved to release an additional instalment of dearness allowance (DA) tocentral government employees and dearness relief (DR) to pensioners with effectfrom January 1, 2020, an official statement said.
There will be an increase of 4 per cent over the existingrate of 17 per cent of the basic pay/pension to compensate for price rise, itadded. “The combined impact on the exchequer on account of both dearness allowanceand dearness relief would be Rs 12,510.04 crore per annum and Rs 14,595.04crore in financial year 2020-21 (for a period of 14 months from January 2020 toFebruary 2021),” the statement said.
It will benefit about 48.34 lakh central government employeesand 65.26 lakh pensioners.”The increase is in accordance with theaccepted formula, which is based on the recommendations of the 7th Central PayCommission,” it added.