Centre approves 3% hike in Dearness Allowance

The decision to hike the allowance will put an annual burden of Rs 9,488 crore on the exchequer

Ahead of the festive season, the Centre on Thursday increased the Dearness Allowance (DA) by 3% to 31% of the basic pay/pension, a move that would bring cheer to 47.14 lakh central government employees and 68.62 lakh pensioners.

The increase in the DA will be applicable from July 1, 2021.

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The additional cost to the exchequer on account of the fresh DA and Dearness Relief (DR) hikes would be around Rs 9,488.70 crore per annum.

Earlier, the Centre had increased DA and DR from 17% to 28% with effect from July 1, 2021, as the regular hikes were deferred due to the Covid-19 pandemic.

The instalments of DA and DR for January 1, 2020, July 1, 2020, and January 1, 2021, were frozen as the government was shoring up resources to deal with the unprecedented health crisis.

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