7th pay commission: 3% hike in Dearness Allowance for central govt employees
The hike is in accordance with the accepted formula based on the recommendations of the 7th Central Pay commission
The Centre on Wednesday hiked the dearness allowance (DA) for central government employees and pensioners. The decision was taken by the cabinet committee on economic affairs in a meeting chaired by Prime Minister Narendra Modi.
It means an increase of three per cent over the existing rate of 31 per cent of the basic pay to compensate for the price rise, the government statement said.
According to the Department of Expenditure under the Ministry of Finance, the term basic pay means the pay drawn according to the 7th pay commission and does not include any other pay.
The additional instalment will be effective from January 1 this year. The hike is in accordance with the accepted formula based on the recommendations of the 7th Central Pay commission. The combined expenditure to the state exchequer will be ₹9,544.50 crore per annum. According to the government, the new dearness allowance hike will benefit 47.68 lakh central government employees and 68.62 lakh pensioners.
The dearness allowance hike has come as a relief for the citizens bearing the brunt of petrol and diesel prices.
Last October, the union cabinet had hiked the dearness allowance by three per cent ahead of Diwali which was effective from July 1, 2021. Three months before, the Centre had hiked dearness allowance from 17 to 28 per cent.
Dearness allowance is actually a component of the monthly salary which is paid to the employees to compensate for the increase in the cost of living due to inflation. For government employees, the percentage is decided by the government and changes as per its wish.