Combined impact on the exchequer on account would be Rs 12510.04 crore per annum
The Union Cabinet, chaired by the Prime Minister, Narendra Modi has approved to release an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 01 January 2020. There will be an increase of 4% over the existing rate of 17% of the Basic Pay/Pension, to compensate for price rise.The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be Rs 12510.04 crore per annum and Rs 14595.04 crore in Financial Year 2020-21 (for a period of 14 months from January 2020 to February 2021). It will benefit about 48.34 lakh Central Government employees and 65.26 lakh pensioners.
The increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission.
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