The Dearness Allowance for central government employees shall be enhanced from the existing rate of 28 per cent to 31 per cent of the basic pay with effect from July 1, 2021,” the office memorandum, Department of Expenditure under Finance Ministry said on October 25. The hike will also apply to civilian employees paid by the Defence Services.
Armed Forces personnel and Railway employees, will be issued separate orders by the Defence and Railways Ministry, respectively.
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The term ‘basic pay’ means the pay drawn as per the 7th pay commission matrix, and doesn’t include any other kind of pay like special pay, etc., the office memorandum, Department of Expenditure under Finance Ministry said.
The Dearness Allowance is provided by the government to its employees to cushion the impact of the rising cost of living. The government typically uses the All India Consumer Price Index-based inflation rate as a broad marker to calculate DA, which is revised twice a year.
A 3 per cent hike in dearness allowance (DA) for central government employees (47.14 Lakh) and dearness relief (DR) for pensioners (68.62 Lakh) over the 28 per cent existing rate, approved by the Union Cabinet last week.
The government had frozen the three additional instalments of the DA and DR, which were due from January 1, 2020, July 1, 2020, and January 1, 2021, due to the outbreak of the COVID – 19 pandemic. The freeze was lifted from July 1, 2021, and the rate was increased from 17 per cent to 28 per cent in July 2021.
Rs 9,488.70 Crore would be the combined impact on the exchequer on account of the Dearness Allowance and Dearness Relief.
Source: The Indian Express, PTI