Dearness Allowance Hiked By 3% To 34%, Effective From January 1, 2022

Prime Minister Narendra Modi's Union Cabinet approved a 3% increase in Dearness Allowance (DA) for central government employees and Dearness Relief (DR) for pensioners on Wednesday.

The DA and DR are presently at 34 percent, with the latest increase taking effect in January 2022.

Dearness Allowance is a component of central government employees' pay that is designed to protect them from the effects of inflation. Dearness The term "relief" refers to the assistance provided to retirees.

According to the government, "this rise is in conformity with the established formula, which is based on the recommendations of the 7th Central Pay Commission."

In the face of rising petrol and oil prices, as well as inflation, the move is expected to help around 47.68 lakh central government employees and 68.62 lakh retirees.

The total impact of Dearness Allowance and Dearness Relief on the exchequer would be Rs 9,544.50 crore per year.

Every year, between January and July, the government updates the DA and DR. However, they differ from person to person depending on whether they live in the city, the suburbs, or the countryside.

Due to the COVID-19 pandemic, the government increased the DA and DR for central government employees and pensioners to 28 percent from 17 percent in July 2021, after maintaining them stable for more than a year. In October 2021, the DA and DR both increased by 3%.