New Delhi: The Union Cabinet has increased the dearness allowance (DA) for its 11 million employees and pensioners to 7 percent, from 5 percent, from January 1, 2018.


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This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission.


Government has said that the hike will benefit about 48.41 lakh central government employees and 61.17 lakh pensioners.


It said that the combined impact on the exchequer on account of both DA and DR would be Rs 6,077.72 crore per annum, and Rs 7,090.68 crore in 2018-19 (for a period of 14 months from January, 2018 to February, 2019).


The latest news on dearness allowance has given fresh impetus to lakhs of central government employees who are eagerly waiting for hike in their basic pay under 7th Pay Commission.


The Union Cabinet had in June approved recommendations of the CPC with 34 modifications. The new scales of pay provide for entry-level basic pay going up from Rs 7,000 per month to Rs 18,000, while at the highest level i.e. Secretary, it would go up from Rs 90,000 to Rs 2.5 lakh. For Class 1 officers, the starting salary will be Rs 56,100.


However, government employees have been demanding hike the fitment formula 3.68 times of basic pay of 6th pay commission. The central government employees unions have also been demanding for hiking minimum pay of Rs 18,000 to Rs 26,000. They have also demanded that fitment factor be raised from 2.57 times to 3.68 times.