Union Cabinet approves 2% DA hike for central govt employees

New Delhi: The Union cabinet chaired by Prime Minister Narendra Modi on Friday approved a 2% increase in payouts to Central government employees and pensioners to compensate against inflation.

Dearness allowance (DA) to the central government employees has been increased to 55% from 53% and dearness relief (DR) for pensioners has gone up by 2% to 55%. It will put an extra burden of Rs 6614.04 crore to the exchequer.

This increase will be effective from January 1, 2025. This means the Central government employees and pensioners will get the raised DA for three months January-March period as arrears along with their April salaries.

Payouts to the central government employees are revised twice in the year in line with the inflationary trend. In July it was increased by 3%. 

Addressing a media briefing Union Minister Ashwini Vaishnaw said hike in payouts will benefit about 48.66 lakh Central Government employees and 66.55 lakh pensioners.

The minister informed that the cabinet’s decision to increase DA by 2% was in accordance with the accepted formula, which is based on the recommendations of the Seventh Central Pay Commission.