The Union Cabinet, chaired by Prime Minister Narendra Modi, approved a 3% increase in Dearness Allowance (DA) for central government employees on Wednesday. The hike, which takes effect from July 1, 2024, also extends to pensioners, with Dearness Relief (DR) being increased by the same percentage.

The Dearness Relief for pensioners has also been revised by 3%, Vaishnaw said.

“The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved an additional installment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 01.07.2024 representing an increase of three percent (3%) over the existing rate of 50% of the Basic Pay/Pension, to compensate against price rise,” as per a government release.

According to a government release, the total financial burden on the exchequer due to the DA and DR revisions will be ₹9,448.35 crore annually. This increase will benefit around 49.18 lakh central government employees and 64.89 lakh pensioners.

The DA/DR adjustments, made twice a year on January 1 and July 1, are calculated based on the All India Consumer Price Index for Industrial Workers (AICPI-IW), published by the Labour Bureau.

With the hike effective from July, employees will receive arrears for July, August, and September along with their revised payments. The revisions aim to protect against the erosion of real pay due to inflation.

(ANI)