The Union Cabinet on Wednesday approved a hike of 3 per cent in dearness allowance (DA) for central government employees and dearness relief (DR) for pensioners over the existing rate of 31 per cent of the basic pay/pension.
The decision was taken in the Cabinet meeting chaired by Prime Minister Narendra Modi.
The new rates of DA and DR will be effective from January 1, 2022, the government said in a press statement.
“This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission,” the government said.
The combined impact on the exchequer on account of both DA and DR would be Rs.9,544.50 crore per annum.
The move is set to benefit about 47.68 lakh central government employees and 68.62 lakh pensioners.
Prior to this hike, DA and DR were raised by 3 per cent to 31 per cent by the Cabinet in October last year.