The Union Cabinet took a significant step on Wednesday by granting approval for a 4 percent hike in Dearness Allowance (DA) and Dearness Relief (DR) for central government employees and pensioners, according to sources cited by India Today TV.
This development had been anticipated and insiders had informed India Today TV on the preceding Tuesday that the Central Government would give the green light to the 4 percent DA increase in the wake of the Cabinet's meeting.
As a result of this decision, the DA for central government employees will see an elevation from the present 42 percent to 46 percent.
Minister of State for Finance, Anurag Thakur, shared that the implementation of the additional dearness allowance and dearness relief increment will take effect from July 1, 2023.
"The Dearness Allowance for Central government employees and the Dearness Relief for pensioners has been increased by 4 percent. This DA increase will be enforced commencing July 1, 2023," he asserted.
Thakur mentioned that the 4 percent DA and DR increase would necessitate an annual financial allocation of Rs 12,857 crore from the government.
The decision is arriving during the ongoing festive season and is being characterized as a 'Diwali gift' for numerous central government employees and pensioners.
This policy move is set to have a positive impact on 48.67 lakh central government employees and 67.95 lakh pensioners.
The significance of this development lies in the fact that central government employees will witness augmented salaries commencing from the month of November, and they will also receive arrears covering the period between July and October.
For those individuals receiving a minimum basic salary of Rs 18,000, their current DA rate of 42 percent translates into an added monthly income of Rs 7,560. However, at the elevated DA rate of 46 percent, their monthly salary boost will increase to Rs 8,280.
Meanwhile, those individuals with a maximum basic salary of Rs 56,900, who are currently benefiting from the 42 percent DA rate, are presently enjoying a monthly income amounting to Rs 23,898. At the increased DA rate of 46 percent, these individuals will witness their monthly income expanding to Rs 26,174.
It is pertinent to note that the DA functions as an allowance to account for the cost of living and serves as a financial adjustment for the dedicated workforce of the government. In a similar vein, Dearness Relief (DR) fulfills the role of aiding central government pensioners in managing the rising costs associated with daily living. The government revises the rates of both DA and DR every six months.
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