In a development that is likely to bring cheer among central employees, the Union Cabinet has approved a 2% hike in Dearness Allowance (DA) for central government employees. The DA was earlier 2% and now it has been increased to 4%. The decision will benefit more than 1 crore central government employees and pensioners. This increase in DA will be applicable from January 1, 2017. The official communication released by the Union Government reads, “The Union Cabinet chaired by Prime Minister Narendra Modi has approved release of an additional installment of dearness allowance to central government employees and dearness relief to pensioner with effect from January 1, 2017.”
The increase in DA for central government employees is in line with the recommendations of the 7th Central Pay Commission. The increase in dearness allowance would cost the Union Government an additional Rs 5,857.28 crore per annum. The increase in dearness relief would require an additional outlay of Rs 6,833.50 crore, which would be applicable for a period of 14 months, from January 2017 to February 2018. The central government employees who will benefit from this decision include around 48.85 lakh existing employees and 55.51 lakh pensioners.