The Union Cabinet on Wednesday approved the release of an additional two per cent hike in Dearness Allowance (DA) and Dearness Relief (DR) for central government employees, a move that will benefit about 1.1 crore employees and pensioners, according to an official statement.
The hike will come into effect from July 1, 2018.
“The Union Cabinet...has approved to release an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. July 01, 2018 representing an increase of 2 per cent over the existing rate of 7 per cent of the Basic Pay/Pension, to compensate for price rise,” the government said.
The combined impact on the exchequer on account of both DA and DR would be Rs 6,112.20 crore per annum and Rs 4,074.80 crore in the financial year 2018-19 (8 months from July, 2018 to February, 2019).
The increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission.
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The hike will benefit about 48.41 lakh central government employees and 62.03 lakh pensioners, the government added.
(With inputs from agencies)