The Union Cabinet on Wednesday approved a 3% increase in Dearness Allowance (DA) for central government employees and pensioners. The revised rate will take effect from July 1.
The move is expected to benefit nearly one crore central government staff and retired personnel. Dearness Allowance is a cost-of-living adjustment paid to employees and pensioners to help offset inflation and rising household expenses.
The hike follows the standard formula based on the Consumer Price Index (CPI) data for industrial workers, which is used to calculate DA revisions twice a year. These revisions are generally made in January and July.
Officials said the decision is likely to bring additional relief to employees and pensioners ahead of the festive season, potentially boosting consumer spending.
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Previous DA hike
Earlier this year, in March, the government had approved a 2% rise in DA, taking the rate from 53% to 55% of the basic salary and pension. The latest revision will add to this figure, providing a further increase in take-home pay and pension amounts.
For instance, an employee with a basic salary of Rs 50,000 currently receives Rs 26,500 as DA following the March hike. With the additional 3%, this figure will rise further, easing the impact of high living costs.
The Cabinet’s approval marks the second DA increase this year and reflects the government’s commitment to shielding employees and pensioners from inflationary pressures.
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