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7th Pay Commission: Cabinet hikes Dearness Allowance (DA) by 4% for central government employees. Details here

7th Pay Commission Latest Update: The Centre has hiked the Dearness Allowance (DA) for its employees by 4 per cent on Wednesday. DA is aimed at offsetting the inflationary impact on the employees’ salary. Under the 7th Pay Commission, the government revises dearness allowance twice a year – in January and July.

ET Now Digital

Updated Sep 28, 2022, 15:33 IST

Money

New Delhi: In a big cheer for the central government employees and pensioners, the Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday (September 28) announced a 4 per cent increase in the Dearness Allowance (DA). The government has also hiked the dearness relief (DR) for pensioners with same percentage.

Union minister Anurag Thakur announced that the hike will be effective from July 1, 2022. He added that the government has allocated Rs 12, 852 crore for the benefit of over 50 lakh government employees and about 62 lakh pensioners ahead of the festive season.

The latest hike takes the DA to 38 per cent, up from 34 per cent. A 4 per cent DA hike translates to an increase of Rs 720 in their salary. For example, if the basic salary of a central government employee is Rs 18,000, then according to 34 per cent, he is entitled to receive DA of Rs 6,120.

With the 4 per cent hike when the DA becomes 38 per cent, the employee will get Rs 6,840. That is, he will get Rs 720 more.

The additional sum is likely to act as a stimulant to boost demand during the festival season, particularly consumer durables, opine economists.

The central government has not paid DA to its employees for 18 months i.e. between January 1, 2020 and June 30, 2021. Employees have been demanding its payment for a long time.

The Union Cabinet had in March approved a 3 per cent hike in the Dearness Allowance (DA), effective from January 1, 2022. The government also gave its nod to the release an additional instalment of Dearness Relief (DR) to pensioners.

Apart from the DA hike, the Union Cabinet has also approved Productivity Linked Bonus of 78 days for non-gazetted railway employees.

What is Dearness Allowance?

A part of the remuneration of government employees and pensioners, DA is aimed at offsetting the inflationary impact on employees’ salary. Under the 7th Pay Commission, the government revises dearness allowance twice a year – in January and July. This allowance is also based on whether an employee is located in urban, semi-urban, or rural areas.

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