After being delayed for more than a year and a half, the dearness allowance (DA) for Central government employees is finally being revised. Following the approval by the Union Cabinet, starting 1 April, 2022 the DA will increased by three per cent.
That means, the DA will now be 34 per cent of the basic salary of Central government employees.
The dearness allowance is the Government’s way of helping its employees cope with rising prices and protect them from the adverse effects of inflation. As the effect of inflation varies from location to location, the DA also varies for employees depending on whether they reside in the urban areas, semi-urban areas or in rural India.
This increment in DA and dearness relief (DR) will benefit all Central government employees and pensioners, respectively.
The increment is in line with the formula recommended by the Seventh Central Pay Commission needless to say it will increase the pressure on the treasury. A total of over Rs 9,000 crore will be spent every year towards payment of DA and DR. The same will benefit over 47 lakh Central government employees and over 68 lakh pensioners.
The pandemic had delayed this increment. Last year, in July, the DA and DR for Central government employees had been hiked to 28 per cent from the earlier 17 after a very long gap. Again, in October last year, an additional three per cent hike was announced taking the DA and DR to 31 per cent of the basic pay.