The Centre on Wednesday increased the Dearness Allowance (DA) by 3 percentage points effective from July 1 this year, benefitting more than 1 crore employees and pensioners ahead of the Diwali festival.

The Union Cabinet has approved to increase Dearness Allowance (DA) to central government employees and Dearness Relief (DR) to pensioners by three percentage points of the basic pay/pension ahead of Diwali, Union Minister Ashwini Vaishnaw said after the Cabinet meeting.

The minister also offered Diwali greetings to all central government employees and pensioners.

The DA/DR hike will be effected from July 1, 2024, the minister informed.

He also informed that the financial implication of this DA/DR hike is Rs 9,448 crore.

Earlier in March this year, the government hiked DA/DR by 4 percentage points to 50 per cent from January 1, 2024.

The minister said that the DA hike is based on the 12-month average of All India Consumer Price Index-Industrial Workers The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners from July 1, 2024, representing an increase of three per cent (3%) over the existing rate of 50 per cent of the Basic Pay/Pension, to compensate against price rise, an official statement said.

This increase is in accordance with the accepted formula, which is based on the recommendations of the Seventh Central Pay Commission.

The combined impact on the exchequer on account of both DA and DR would be Rs 9,448.35 crore per annum.

This will benefit about 49.18 lakh central government employees and 64.89 lakh pensioners.