The government on Wednesday (July 14) cleared a hike in Dearness Allowance (DA) and Dearness Relief (DR) benefits given to Central government employees and pensioners from 17 per cent to 28 per cent, media reports said.
Sources that the Union Cabinet has decided to raise DA and DR after it was put on hold last year.
The development is a major relief for lakhs of Central government employees and pensioners who have been waiting for the announcement for months.
The move comes following reports speculating that these benefits under the Seventh Central Pay Commission (7th CPC) would be restored in July. The DA and DR hike benefits will come into effect from July 1, 2021. The move is expected to cost the government approximately ₹34,400 crore.
An earlier report suggested that it could take a while for the employees to get the hiked DA as several approvals are required. For any such delay, Central government employees are likely to get arrears accruing from July 1, 2021.
At least three DA installments were due before the hike was cleared by the cabinet — two from last year and one from this year. An 11 per cent DA hike has been approved as part of the three pending installments, reports said.
In March this year, then finance minister of state Anurag Thakur had informed the Rajya Sabha that three pending installments of DA and DR would be restored from July. In 2020, the government stalled the implementation of the DA hike owing to the COVID-19 pandemic.
At present, Central government employees get 17 per cent of their basic salary as DA. A 4 per cent hike was announced in 2020 but was not implemented owing to the pandemic. As per the 7th pay commission DA calculation, DA due from January 2021 will be at least 4 per cent while DA getting due from July will be either 3 per cent or 4 per cent.