Good News For Central Government Employees, Pensioners: Modi Government Clears 4% Dearness Allowance (DA) Hike

The Cabinet chaired by the PM Narendra Modi on Friday approved to release an additional instalment of Dearness Allowance to Central government employees and pensioners.

New Delhi: The Government of India has announced to hike 4% Dearness Allowance (DA) of central employees and pensioners, which is due from January 1, 2023. It will benefit 47.58 lakh employees and 69.76 lakh pensioners. The Cabinet took the decision on Friday in the meeting to release of an additional instalment of Dearness Allowance.   

"The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi, today has given its approval to release an additional instalment of Dearness Allowance to Central Government employees and Dearness Relief to Pensioners with effect from 01.01.2023," said the government's statement.

It further said that the additional instalment will represent an increase of 4% over the existing rate of 38% of the Basic Pay/Pension, to compensate against the price rise. The total dearness allowance now stands at 42 per cent.

Govt increases Dearness Allowance and Dearness Relief by 4%. It will benefit 47.58 lakh central govt employees & 69.76 lakh pensioners. Combined impact on the exchequer on account of both DA & DR would be Rs. 12,815.60 crore per annum.https://t.co/DBpPfxonnK#CabinetDecisions pic.twitter.com/aiLSlSL6J2

— NSitharamanOffice (@nsitharamanoffc) March 24, 2023

"The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be Rs.12,815.60 crore per annum. This will benefit about 47.58 lakh Central Governments employees and 69.76 lakh pensioners," the government added in the statement.

Briefing the media after a meeting of union cabinet, Information and Broadcasting Minister Anurag Thakur said the combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be Rs.12,815.60 crore per annum.

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

The central government increased the dearness allowance last time on September 28, 2022, which was effective from July 1, 2022. Employees and pensioners have long been demanding to release the additional dearness allowance due from January 1, 2023. The demand for DA hike was vociferous amid the high inflation rate above RBI’s tolerance limit and food and energy prices touching the sky.