DA hiked to 5% from 4% for central government employees

New Delhi: The Union Cabinet on Tuesday approved a 1% hike in dearness allowance (DA) and dearness relief (DR) to 5%, benefiting 48.85 central government employees and 55.51 lakh pensioners.

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

The DA/DR has been hiked by 1 percent over the existing rate of 4 percent 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.

The combined impact on the exchequer on account of both DA and DR would be Rs 3,068.26 crore per annum and Rs 2,045.50 crore in the financial year 2017-18 (for a period of 8 months from July 2017 to February 2018).

The hike in the DA hike is as per the agreed methodology of taking average of Consumer Price Index-Industrial Workers for the past 12 months.