The Union Cabinet has increased Dearness allowance (DA) of the Central Government Employees by 4 per cent which now effectively stands at 38 per cent from 34 per cent, according to media reports.

Over 50 lakh central government employees and 62 lakh pensioners will benefit from the current hike.

Allowance has come as a relief for the central government employees and pensioners amid the increasing inflation and the festival season.

The central government revises dearness allowance and dearness relief on 1 January and 1 July every year, but this decision is usually announced in March and September.

Previously, in March, the Cabinet had approved the proposal to increase the dearness allowance (DA) for central government employees and dearness relief (DR) for pensioners by 3 per cent to 34 per cent of the basic pay from 31 per cent previously, effective January 1, 2022.

All those who are paid based on the 7th Pay Commission will get an increase of ₹ 720 in DA on the basic salary of ₹ 18,000, and this increase will be ₹ 1,000 per month if the basic salary is 25,000.

Similarly, those who were getting ₹ 50,000 basic salary will now get a benefit of ₹ 2,000 per month, and those with a basic salary of ₹ 1,00,000 will get a benefit of ₹ 4,000 in total salary after the 4 per cent increase in dearness allowance.

The grant of dearness relief (DR) to central government pensioners and family pensioners will also be applicable at the same revised rate, as it has been fixed for the employees, from July 1. The pension disbursing authorities, including the nationalized banks, will calculate the quantum of DR payable to each pensioner as per the individual case.

The revised rates will be applicable to central government pensioners, civilian central government pensioners/family pensioners, the armed forces pensioners, civilian pensioners paid out of the defence service, all India service pensioners, railway pensioners/family pensioners, and pensioners who are in receipt of provisional pension.

Until December 31, 2019, all the employees paid based on the 7th Pay Commission were getting a dearness allowance at the rate of 17 per cent, and after that, there was no increase or revision due to Covid for one and a half years after that.

Later, the dearness allowance was increased by 11 per cent to 28 per cent in July 2021, then again by 3 per cent in October 2021, and that too on July 1, 2021. Since July 1, 2021, DA on salary to all central employees and pension to pensioners was 31 per cent from July 1, 2021.

Then, in January 2022 also, the dearness allowance was increased by 3 per cent and the addition of 4 per cent effective July, will take the DA to 38 per cent of basic pay.