The Centre on Wednesday increased the Dearness Allowance (DA) and Dearness Relief (DR) for central government employees and pensioners by 11% from the existing rate to bring it to 28% effective from July 1, 2021. The decision will benefit around 1.14 crore employees and pensioners.
The government had frozen all such hikes, which were due from January 1, 2020, July 1, 2020, and January 1, 2021, due to the ongoing COVID-19 pandemic.
The decision is expected to cost the government approximately Rs 34,400 crore and impact around 48,34,000 central government employees and 65,26,000 pensioners
Dearness allowance is paid by the government to its employees and dearness relief is given to the central government pensioners to compensate them for the rising cost of living due to inflation.
DA hike main pointers
The DA and DR rates have been increased by 11% because three instalments were kept frozen due to the pandemic situation.
Dearness Allowance is a component of the salary that cushions against inflation and is revised twice a year, January and July.
The increase in the DA and DR will impose an annual burden of Rs 34,400 crore on the exchequer.
For this financial year, the hike will cost the exchequer Rs 22,934.56 crore from July to February.
The hiked DA will be restored in July, which means government employees will receive a 28% DA of their basic pay in this month’s salary.
The rate of DA and DR will remain 17% for the period of January 1, 2020, to June 30, 2021.
This means that the central government employees will not get any dues as they have been receiving the DA at a 17% rate.
The government has made it clear that the 28% hike will take effect on July salary and there will be no arrear for the period of January 2020-June 2021.
Source: Latest News by www.dnaindia.com.
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