Centre raises Dearness Allowance of government employees by 4%

Centre raises Dearness Allowance of government employees by 4%.

The Centre has raised the Dearness Allowance (DA) of government employees by 4 per cent, bringing it to 50 per cent.

Centre raises DA of government employees by 4 per cent. (Pradeep Gaur/Mint File Photo)

The union cabinet, chaired by Prime Minister Narendra Modi, approved the release of an additional instalment of DA to central government employees and Dearness Relief (DR) to pensioners, effective from January 1, 2024, the government release said.

This marks a 4 per cent increase over the existing rate of 46 per cent of the Basic Pay/Pension, aimed at compensating for the impact of rising prices, the release said.

The combined financial impact on the exchequer, including both Dearness Allowance and Dearness Relief, amounts to Rs.12,868.72 crore per annum, the government said.

Along with DA, the union government has also increased transport allowance, canteen allowance, and deputation allowance among others by 25 per cent. House Rent Allowance has been raised from 27 per cent, 19 per cent and 9 per cent of basic pay to 30 per cent, 20 per cent and 10 per cent, respectively.

Benefits under gratuity have been increased by 25 per cent with an increase ceiling of ₹25 lakh from the existing ₹20 lakh.

The burden on the exchequer due to an increase in various allowances would be ₹9,400 crore annually, the statement said.

This decision will benefit approximately 49.18 lakh central government employees and 67.95 lakh pensioners, it added.

The government said that the increase adheres to the accepted formula based on the recommendations of the 7th Central Pay Commission, it added.