The Union Cabinet on Tuesday increased dearness allowance and dearness relief to pensioners by 1 per cent from existing 4 per cent to 5 per cent, benefiting 48.85 lakh central government employees and 55.51 lakh pensioners. This will be applicable from July 1, 2017, the cabinet said.
The decision was taken at the Union Cabinet meeting chaired by Prime Minister Narendra Modi. “The Union Cabinet chaired by Prime Minister Narendra Modi has approved release of an additional instalment of dearness allowance to central government employees and dearness relief to pensioner with effect from July 1, 2017,” an official statement said.
The DA/DR has been hiked by 1 per cent over the existing rate of 4 per cent of the basic pay/pension to compensate for price rise and it is in accordance with the accepted formula based on the recommendation of 7th pay commission, the statement said.
The combined impact on the exchequer on account of both DA and DR would be Rs 3,068.26 crore per annum and Rs 2,045.50 crore in the financial year 2017-18 (for a period of 8 months from July 2017 to February 2018).