The Union Cabinet Friday approved the proposal to increase Dearness Allowance (DA) for central government employees and pensioners by 4%, with effect from January 1, 2020.
The increase of 4% in DA is over the existing rate of 17% of the basic pay, pensions.
The move, which will benefit 48.34 lakh central government employees and 65.26 lakh pensioners, is expected to cost the exchequer Rs 14,595 crore.
DA is paid to the central government employees each year with effect from January 1 and July 1. It is paid in March and September respectively. The allowance is paid to offset the impact of inflation.
“The increase in DA is done accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission,” an official statement said.
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