Union Cabinet Approves 3% Hike In Dearness Allowance Of Central Govt Employees Ahead Of Diwali

New Delhi: The Union Cabinet on Wednesday approved a 3 per cent hike in Dearness Allowance (DA) for government employees.

During a press briefing after the Cabinet meeting on Wednesday, Union Minister Ashwini Vaishnaw said that the DA hike was effective from July 1, 2024.

The Dearness Relief for pensioners has also been revised by 3 per cent, Vaishnaw said.

"The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has approved an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 01.07.2024 representing an increase of three percent (3 per cent) over the existing rate of 50 per cent of the Basic Pay/Pension, to compensate against price rise," as per a government release.

The combined impact on the exchequer on account of both DA and DR would be Rs .9,448.35 crore per annum, it added.

As per the release, 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 49.18 lakh central government employees and 64.89 lakh pensioners.

About Dearness Allowance/Dearness Relief

The Dearness 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 values.

These are revised twice a year from January 1 and July 1 based on increase in 12 monthly average of All India Consumer Price Index for Industrial Workers (AICPI-IW) published by the Labour Bureau.

Since the hike is effective from July 2024, the employees will get arrears for July, August and September.