Published On: Wed, Oct 9th, 2019

Dearness Allowance hiked by 5%; to benefit 50 lakh government employees, 65 lakh pensioners

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Cabinet approves 5% additional DA/DR due July, 2019

The Union Cabinet Chaired by Prime Minister Narendra Modi today approved to release an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 01.07.2019 representing an increase of 5% over the existing rate of 12% of the Basic pay/Pension, to compensate for price rise.  This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission.

 This will benefit about 49.93 lakh Central Government employees and 65.26 lakh pensioners.

The additional financial implication on account of this increase in Dearness Allowance is estimated at Rs 8590.20 Crore per year; and Rs 5726.80 Crore in the current Financial Year of 2019-20 (for 8 months from July 2019 to February 2020).

The additional financial implication on account of the Dearness Relief to pensioners is estimated to be Rs 7319.15 Crore per annum and Rs 4870 Crore in the current FY.

Dear Allowance/Dearness Relief is paid to Central Government employees/pensioners to adjust the cost of living and to protect their basic pay/pension from erosion in the real value. Dear Allowance/Dearness Relief is revised twice a year from 1st January and 1st July.

Dearness Allowance hiked: Raise would cost the exchequer nearly Rs 16,000 crore. The DA has now been increased from 12 per cent to 17 per cent.

DA hiked by 5%: Union Minister Prakash Javadekar was addressing the press following a Cabinet meeting in New Delhi. (Express Photo/File)

Dearness Allowance hiked by 5%:

The Union government Wednesday hiked the Dearness Allowance (DA) for central government employees by five per cent from the existing 12 per cent. The announcement, made by Union Minister Prakash Javadekar following a Cabinet meeting, is expected to benefit 50 lakh central government employees and 65 lakh pensioners.

Raise would cost the exchequer nearly Rs 16,000 crore. The DA has now been increased to 17 per cent. “This is the highest ever 5 percentage points increase in DA in one go by the central government,” Javadekar said.

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