New Delhi: The national government has announced an increase in Dearness Allowance and Dearness Relief under the 7th Pay Commission, which is good news for employees. Employees and retirees received a 3% increase in their DA and DR. Following a meeting of the Cabinet committee chaired by Prime Minister Narendra Modi, the Centre announced that government employees will receive up to 34% DA with their salary.


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"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 a 3% increase over the existing rate of 31% of the Basic Pay/Pension, to compensate for price rises," the prime minister's office said in a press release.


According to the government, the step will help around 47 lakh employees and 68 lakh retirees. "The total impact of Dearness Allowance and Dearness Relief on the exchequer would be Rs 9,544.50 crore per annum." According to the press release, "this will benefit roughly 47.68 lakh Central Government employees and 68.62 lakh pensioners." The increase will take effect on January 1, 2022, according to the administration.


Due to the impact of the Covid-19 epidemic, the government has decided to freeze the DA and DR hike for current and ex-servicemen since 2020, for a period of one and a half years. Arrears have not yet been released.


The raise is in line with the established formula, which is based on the 7th Pay Commission's recommendations, according to the Centre.


The DA for central government employees has been increased to 34% following the latest adjustment. The rate of Dearness Benefit was 17% till July 2021, implying that the allowance has been doubled for servicemen in the last six months. After an 11 percent DA boost in July, the government announced a 3% DA hike in August, bringing the total to 28 percent.


Following the recent increase, central government employees will get a Dearness Allowance of 34%, calculated by multiplying the existing Dearness Allowance rate by the employee's basic wage. Assume that this computation is performed on the salary of an employee with a basic pay of Rs 18,000 per month. Previously, the employee was receiving Rs 5,580 in DA at a rate of 31%. The employee would receive Rs 6,120 in DA as a result of the current raise. After the most recent DA boost, this translates to a Rs 540 increase.


Every year in January and July, the government raises DA to keep inflation at bay.


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