Acche Din for Govt. employees: Cabinet gives nod to 2% hike in Dearness Allowance


With a slew of measures initiated towards the betterment of masses, a new bill thrusted on the same objective was passed by the Centre on Wednesday.

The Centre on Wednesday hiked dearness allowance and dearness relief to 4 per cent from existing 2 per cent. The allowance will be operational with retrospective effect from January 1, 2017.

Notably, the scheme will be benefiting not less than 48.85 employees and 55.51 lakh pensioners.

“The Union Cabinet chaired by Prime Minister Narendra Modi has approved release of an additional installment of dearness allowance to central government employees and dearness relief to pensioner with effect from January 1, 2017,” an official statement said.

The Dearness Allowance (DA) is an extension of government employees’ salary. It is an adjustment to the rising cost of living allowance. This allowance is majorly paid to Government employees, Public sector employees (PSU)and pensioners in Pakistan, Bangladesh and India.

This allowance is a calculated percentage of an Indian citizen’s basic salary. It has direct correlation with the inflation trends in country. It is majorly paid out to buttress the living standards of employees.

The DA/DR has been increased by 2 per cent over the existing rate of 2 per cent of the basic pay/pension to compensate for price rise and it is in accordance with the accepted formula based on the recommendation of 7th pay commission, the statement said.

This hike in DA/DR will benefit 48.85 lakh central government employees and 55.51 lakh pensioners, it said.

The exchequer post release of dearness allowance and dearness relief would be Rs 5,857.28 crore per annum and Rs 6,833.50 crore in the Financial Year 2017-18 (for a period of 14 months from January, 2017 to February, 2018).

The hike is relatively a small surge in comparison to the rise in cost of living, the Confederation of Central Government Employees said.

The DA/DR hike is formulated as per an agreed methodology of taking average of Consumer Price Index-Industrial Workers for a period of 12 months.