The federal government has announced an increase in dearness allowance (DA) for its employees. According to the notification, the DA has been increased by 3% to 34% from 31% previously. The increase will go into effect on January 1, 2022.
The increase in DA will help not just central government employees, but also central government retirees and family pensioners who get a central government pension. This increase will come in the form of Dearness Relief (DR).
“The Union Cabinet, chaired by Prime Minister Shri Narendra Modi, has approved the release of an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 01.01.2022, representing an increase of 3% over the existing rate of 31% of the Basic Pay/Pension, to compensate for price rises,” according to a press release issued today.
The announcement went on to say that the combined impact of Dearness Allowance and Dearness Relief on the exchequer will be Rs.9,544.50 crore per year. About 47.68 lakh Central Government workers and 68.62 lakh retirees will profit from this.
Since the judgement will take effect on January 1, 2022, central employees and retirees will be paid in three-month arrears.
Due to the new coronavirus pandemic, the government stopped the increase of DA/DR from January 1, 2020 to June 30, 2021. However, as of July 1, 2021, the government has reintroduced the DA/DR, but at a rate of 28 percent, up from 17 percent earlier. The rise in DA from 17 percent to 28 percent, according to the Department of Expenditure’s decree, includes extra instalments due on January 1, 2020, July 1, 2020, and January 1, 2021. The percentage of dearness allowance will stay at 17 percent from January 1, 2020 to June 30, 2021.
The administration increased the DA by 3% over the present rate of 28 percent of basic salary and pension in October 2021 as a Diwali gift to central government employees. This increased the DA/DR to 31%. The increase took effect on July 1, 2021.
“The Union Cabinet, chaired by Prime Minister Shri Narendra Modi, today approved the release of an additional instalment of Dearness Allowance to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 1.7.2021, representing an increase of 3% over the existing rate of 28 percent of the Basic Pay / Pension, to compensate for price rises,” according to a press release issued on October 21, 2021.
This raise is in conformity with the established methodology, which is based on the 7th Central Pay Commission’s recommendations. The total impact of Dearness Allowance and Dearness Relief on the exchequer will be Rs.9,488.70 crore per year. About 47.14 lakh Central Government workers and 68.62 lakh retirees would profit from this.”
Government employees typically get a dearness allowance to compensate for rising inflation. The decision made today would increase the amount of money available to government employees and retirees.
Dearness Allowance/Dearness Relief is a payment made to central government employees/pensioners to help them adjust to rising costs of living and safeguard their basic pay/pension from depreciation. On January 1 and July 1 of each year, the Dear Allowance/Dearness Relief is amended.
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