Cabinet raises DA for central govt employees and pensioners to 7% from 5%

The Union Cabinet on Wednesday increased the dearness allowance (DA) for its 11 million employees and pensioners to 7 per cent, from 5 per cent, from January 1, 2018.

"The Union Cabinet chaired by Prime Minister Narendra Modi has given its approval to release an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners from January 1, 2018 representing an increase of 2 per cent over the existing rate of 5 per cent of the Basic Pay/Pension, to compensate for price rise," an official statement said.

According to the statement, the hike will benefit about 4.8 million central government employees and 6.1 million pensioners.

It said that the combined impact on the exchequer on account of both DA and DR would be Rs 60.78 billion per annum, and Rs 70.90 billion in 2018-19 (for a period of 14 months from January, 2018 to February, 2019).

This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission, it added.