Union Cabinet Approves 3% Hike in Dearness Allowance of Central Govt Employees

The hike comes over the existing rate of 31% of the Basic Pay/Pension, to compensate for the price rise.

Union Cabinet on Wednesday, 30 March increased the Dearness Allowance (DA) of Central Government employees and Dearness Relief (DR) of pensioners by 3%, with effect from 1 January 2022.

(Source - iStock)

The Union Cabinet on Wednesday, 30 March, approved an increase in the Dearness Allowance (DA) of central government employees and Dearness Relief (DR) of pensioners by 3 percent, with effect from 1 January 2022.

The hike comes over the existing rate of 31 percent of the Basic Pay/Pension, in order to compensate for the rise in prices.

"This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission," the government said in an official release.

The combined impact on the exchequer on account of both the DA and the DR would be Rs 9,544.50 crore per annum.

This will benefit about 47.68 lakh central government employees and 68.62 lakh pensioners, the release read.

The DA was hiked by 3 per cent from 28 to 31 per cent last year, effective July 1 2021.