DA, DR hiked by 3 % for Central govt employees, pensioners

The union cabinet has approved the proposal to increase the dearness allowance for central government employees and pensioners by 3 per cent to 34 per cent of the basic pay from 31 per cent previously, effective January 1, 2022.  That increase in DA is per the accepted formula, which is based on the recommendations of the 7th central pay commission. The Cabinet meeting chaired by the Prime Minister, Narendra Modi. It means an increase of three per cent over the existing rate of 31 per cent of the basic pay to compensate for the price rise, the government statement said. 

According to the Department of Expenditure under the Ministry of Finance, the term basic pay means the pay drawn according to the 7th pay commission and does not include any other pay. The combined expenditure to the state exchequer will be Rs 9,544.50 crore per annum. The new dearness allowance hike will benefit 47.68 lakh central government employees and 68.62 lakh pensioners. Dearness allowance is actually a component of the monthly salary which is paid to the employees to compensate for the increase in the cost of living due to inflation. For government employees, the percentage is decided by the government and changes as per its wish.