Centre hikes dearness allowance for staff, pensioners by 4 percentage points
The Union Cabinet, chaired by Prime Minister Narendra Modi on Friday, approved an additional instalment of dearness allowance (DA) to central government employees and dearness relief (DR) to pensioners, raising both by 4 percentage points, an official statement said, taking the two benefits to 42% of basic pay and pension
The Union Cabinet, chaired by Prime Minister Narendra Modi on Friday, approved an additional instalment of dearness allowance (DA) to central government employees and dearness relief (DR) to pensioners, raising both by 4 percentage points, an official statement said, taking the two benefits to 42% of basic pay and pension.
In another key decision, the Cabinet approved a subsidy of ₹200 per 14.2 kg cylinder of cooking gas for up to 12 refills a year for beneficiaries of the Pradhan Mantri Ujjwala Yojana (PMUY).
As on March 1, 2023, there are 90.5 million beneficiaries of the subsidised liquified petroleum gas (LPG) scheme.
The Centre last raised the dearness allowance in September 2022 with retrospective effect from July 1, 2022. In the last instalment too, the allowance was increased by 4 percentage points, which took it to 38%.
The government usually revises DA twice a year.
Dearness allowance, payable to current employees, and dearness relief, which applies to retirees from the central government, are indexed to inflation and essentially a pay rise to account for increase in prices.
“This (raise in DA/DR) will benefit about 47.58 lakh (4.75 million) central governments employees and 69.76 lakh (6.97 million) pensioners,” the statement said.
Addressing reporters after the meeting, Union minister Anurag Thakur said the Centre will spend ₹12,815 crore to fund the hikes. The DA hike will take effect retrospectively from January 1, 2023, he said.
The total expenditure for the LPG subsidy will be ₹6,100 crore for 2022-23 and ₹7,680 crore for 2023-24, the statement said. The subsidy is credited directly to bank accounts of beneficiaries.
“There has been a sharp increase in international prices of LPG due to various geopolitical reasons. It is important to shield PMUY beneficiaries from high LPG prices,” the government said.
The government, in May 2016, launched PMUY scheme to provide a deposit free LPG connection and a cylinder to adult women of poor households.
However, high cost of refill cylinders meant that average refills still are no more than 4% annually. “The current subsidy for up to 12 refills, assuming one refill lasts a month, will cover a year’s supply for PMUY beneficiaries,” said Rakhi Abrol, a policy analyst.
Among Friday’s decisions, the Union Cabinet also approved a minimum support price (MSP) of ₹5050 per quintal (100kg) for raw jute for the 2023-24 season.
