Ahead of the festive season, the Centre has raised the dearness allowance for government employees by 4 per cent over the existing rate of 34 per cent of basic pay/pension.
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Effective date
This is effective July 1, 2022 and will benefit 41.85 lakh central government employees and 69.76 lakh pensioners.
The hike comes after recommendations of the 7th pay commission.
Previous hikes
The latest hike will amount to a dearness allowance of 38 per cent for the central government employees.
The DA is revised by the government usually twice in a year — January and July.
The last hike was announced in March, with effect from January 1, 2022.
This was a hike of 3 per cent over the previous rate of 31 per cent.
Purpose, calculation
DA is provided by the central government for its employees to adjust the cost of living and to protect their basic pay/pension from erosion in the real value.
The hike is calculated based on the percentage increase in 12 monthly average of All India Consumer Price Index for the period ending June 2022.
Pensioners also get dearness relief same as the amount received by the working employees of the central government.
Financial impact
The impact of enhanced dearness allowance to the employees on the exchequer is estimated at Rs 6,591.36 crore per annum and Rs 4,394.24 crore in 2022-23 (8 months from July 2022 to February 2023).
In case of dearness relief, the impact would be Rs 6,261.20 crore per annum and Rs 4,174.12 crore in the current fiscal.
18-month pending arrears
The total extra outgo on the exchequer on account of both DA and DR would be Rs 12,852.5 crore per annum, Information and Broadcasting Minister Anurag Thakur said while briefing the media about the hikes.
Meanwhile, the issue of 18-months DA arrears i.e from January 2020 to June 2021 will likely be taken up in November.
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