New Delhi: The Union Cabinet Wednesday approved the release of an additional installment of dearness allowance (DA) for Central Government employees and dearness relief to pensioners with effect from July 1, 2018.
The move to compensate for the inflation will result in an increase of two percent over the existing rate of seven percent of the basic pay or pension. About 48.41 lakh central government employees and 62 lakh pensioners will be benefited because of the DA hike.
The decision was taken at the Cabinet meeting chaired by Prime Minister Narendra Modi in New Delhi.
The combined impact to the government exchequer on account of both DA and dearness relief would be Rs 6,112 crore per annum and Rs 4,074 crore in the financial year 2018-19 (for a period of eight months, from July 2018 to February 2019), the government said in a statement.
The increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission.
In March this year, the Union Cabinet had hiked DA for government employees and pensioners to seven percent to eight percent, with effect from January 1, 2018.
The DA hike was in accordance with a formula based on the recommendations of the 7th Pay Commission for Central Government employees.
