Delhi: The Union Cabinet Ministry has increased Dearness Allowance (DA) by five per cent for government employees. About 50 lakh central government employees and 62 lakh pensioners will benefit with the increase, said Union Minister Prakash Javadekar during the cabinet briefing at Shastri Bhawan on Wednesday.
To compensate for the price rise, Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday approved to release an additional instalment of DA to Central Government employees and Dearness Relief (DR) to pensioners. The govt increased the DA/DR by 5 per cent over the existing rate of 12 per cent of the basic pay/pension. This increase is based on the recommendations of the 7th Central Pay Commission.
An official statement by the Union Cabinet reads, “The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be Rs 15,909.35 crore per annum and Rs 10,606.20 crore in the financial year 2019-20. This will benefit about 49.93 lakh Central government employees and 65.26 lakh pensioners. The additional financial implication on account of the increase in Dearness Allowance is estimated to be at Rs 8590.20 crore per year and Rs 5726.80 crore in the current financial year. Additional financial implication on account of the Dearness Relief to pensioners is estimated to be Rs 7319.15 crore per annum and Rs 4,870 crore in the current FY.”
Aiming to compensate for the cost of living and to protect their basic pay/pension from erosion in the real value central government pays Dearness Allowance and Dearness Relief to their employees. The govt will revise both DA/DR twice a year as well.