HIGHLIGHTS:
- The central government has announced an increase in DA for its employees
- The DA has been increased by 3% to 34% from 31% previously
- About 47.68 lakh Central Government employees and 68.62 lakh retirees will profit from this
The central government has announced an increase in dearness allowance (DA) for its employees. According to the notification, the DA has been increased by 3% to 34% from 31% previously. The hike announced will be effective from January 1, 2022.
The increase in DA will help not just central government employees, but also central government pensioners and family pensioners who get a central government pension. This increase will come in the form of Dearness Relief (DR).
Approval of the initial installment
“The Union Cabinet, chaired by Prime Minister Shri Narendra Modi, has approved the release of an additional installment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 01.01.2022, representing an increase of 3% over the existing rate of 31% of the Basic Pay/Pension, to compensate for price rises,” according to a press release issued recently.
The announcement went on to say that the combined impact of Dearness Allowance and Dearness Relief on the exchequer will be Rs.9,544.50 crore per year. About 47.68 lakh Central Government employees
and 68.62 lakh retirees will profit from this.
Since the judgment will take effect on January 1, 2022, central employees and retirees will be paid in three-month arrears.
Due to the new corona virus pandemic, the government stopped the increase of DA/DR from January 1, 2020 to June 30, 2021. However, as of July 1, 2021, the government has reintroduced the DA/DR, but at a rate of 28 percent, up from 17 percent earlier. According to a Department of Expenditure order, the rise in DA from 17 to 28 percent includes additional installments.
The administration increased the DA by 3% over the present rate of 28 percent of basic salary and pension in October 2021 as a Diwali gift to central government employees. This increased the DA/DR to 31%.
The increase took effect on July 1, 2021
“The Union Cabinet, chaired by Prime Minister Shri Narendra Modi, recently approved the release of an additional installment of Dearness Allowance to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 1.7.2021, representing an increase of 3% over the existing rate of 28 percent of the Basic Pay / Pension, to compensate for price rises,” according to a press release issued on October 21, 2021.
This increase follows the widely accepted formula, which is based on the recommendation.
What is Dearness Allowance/Dearness Relief?
Dearness Allowance/Dearness Relief is a payment made to central government employees/pensioners to help them adjust to rising costs of living and safeguard their basic pay/pension from depreciation. On January 1 and July 1 of each year, the Dear Allowance/Dearness Relief is amended.
