The cabinet on Wednesday approved the proposal to increase the dearness allowance (DA) for central government employees and pensioners effective July 1, 2022.
There are about 50 lakh central government employees and over 61 lakh pensioners.
“The central government employees and pensioners will become entitled to higher amount of Dearness Allowance (DA) and Dearness Relief (DR) respectively, with effect from July 1, 2022,” said I&B Minister Anurag Thakur.
With the July 1 effective date for the latest dearness announcement hike, the staff would be paid the arrears with their latest salaries which would benefit about 47.68 lakh central government employees and 68.62 lakh pensioners.
The additional financial implications on account of the increase of DA to employees are estimated at Rs 6,591.36 crore per annum, and Rs 4,394.24 crore in the financial year 2022-23 (8 months from July, 2022 to February, 2023).
The additional financial implications in case of pensioners are estimated at Rs 6,261.20 crore per annum, and Rs 4,174.12 crore in the financial year 2022-23.
The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be of the order of Rs 12,852.56 crore per annum and Rs 8,568.36 crore in the current financial year, Thakur said.
The Union Cabinet had in March approved to increase 3 per cent in dearness allowance (DA) under the 7th Pay Commission, thus taking the DA to 34 per cent of the basic income.
The government usually revises the DA rate every six months. This is done to compensate for the loss in purchasing power of the monthly salary/pension wealth due to inflation.
(With inputs from PTI)