There is good news for Central government employees and pensioners. The Union Cabinet has agreed to their dearness allowance (DA) and dearness relief (DR) being hiked from 42 per cent to 46 per cent. That means, an increment of four per cent. Quite the Diwali bonanza for about 48 lakh serving Central government staff and about 67 lakh pensioners. They will receive arrears for the July to October period along with salaries beginning next month onwards.
The hike will be with effect from 1 July 2023 and will cost the government Rs 12,857 crore per year.
Those earning a basic of Rs 18,000 till now were getting Rs 7,560 more as per 42 per cent DA. Post the hike, they will get Rs 8,280 more.
Those with basic salary of Rs 56,900 were taking home Rs 23,898 as DA as per the earlier 42% calculation. Now, with the hiked DA, they will receive Rs 26,174.
Dearness Allowance helps government employees handle the effects of inflation. It is paid to government employees as well as pensioners in India, Bangladesh and Pakistan.
This is a fully taxable allowance and differs from city to city because it is calculated based on the cost of living, and therefore, is a salary component that cannot be fixed. It varies hose in the rural, urban and semi-urban areas, depending on the location they are serving in.