The Union Cabinet has approved a two per cent increase in dearness allowance (DA) for Central government employees and dearness relief (DR) for pensioners, effective retrospectively from January 1. With the revision, the DA and DR rates will increase from 58 per cent to 60 per cent of basic pay and pension, respectively.
The move is expected to benefit more than 50 lakh Central government employees and over 68 lakh pensioners. According to the government, the annual financial impact of the increase will be approximately Rs 6,791 crore.
Dearness allowance and dearness relief are revised periodically to help employees and pensioners offset the impact of inflation and rising living costs. The latest increase follows the recommendations of the accepted formula based on the Consumer Price Index for Industrial Workers (CPI-IW).
The decision comes as a significant relief for government employees and pensioners, boosting their take-home pay and retirement benefits amid persistent inflationary pressures.
