New Delhi: The Centre on Thursday hiked Dearness Allowance (DA) to 50 percent of basic pay from the existing rate of 46 percent effective from January 1 this year, benefitting over 1 crore employees and pensioners ahead of general elections.


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The Union Cabinet has approved to release of an additional installment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners from January 1, 2024, representing an increase of 4 percentage points over the existing rate of 46 percent of the basic pay/pension, to compensate against price rise, Union Minister Piyush Goyal said after the Cabinet meeting.


The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be Rs 12,869 crore per annum. The impact would be Rs 15,014 crore during the year 2024-25 (January 2024 to February 2025). (Also Read: BIG Bonanza To Ujjwala Beneficiaries; Govt Extends Rs 300 LPG Subsidy)


With the increase in DA, transport allowance, canteen allowance, and deputation allowance among others have been increased by 25 percent. (Also Read: Good News For Job Seekers! Elon Musk's Firm X Has Over 1 Million Openings)


House Rent Allowance has been raised from 27 percent, 19 percent, and 9 percent of basic pay to 30 percent, 20 percent, and 10 percent, respectively.


Benefits under gratuity have been increased by 25 percent with an increase ceiling of Rs 25 lakh from the existing Rs 20 lakh. The burden on the exchequer due to an increase in various allowances would be Rs 9,400 crore annually.


The increase in DA and DR in accordance with the accepted formula, is based on the recommendations of the 7th Central Pay Commission.


The decision is likely to benefit 49.18 lakh central government employees besides 67.95 lakh pensioners as Dearness Relief (DR) has been increased at the same rate.