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3% DA hike: Festive cheer for central govt employees ahead of Dussehra, Diwali
The Centre on Wednesday increased the dearness allowance for its employees by three per cent, a move that comes ahead of Dussehra and Diwali festivals.
The central government on Wednesday increased the Dearness Allowance (DA) and Dearness Relief (DR) for its employees by three per cent, a move that comes ahead of Dussehra and Diwali festivals.
The Union Cabinet approved the hike, which will take effect from July 1. This will become the second DA hike this year, benefitting 1.18 crore employees. Of these, the DA will benefit 49.2 lakh employees and 68.7 lakh pensioners of the central government.
The combined impact on the exchequer on account of an increase in both DA and DR would be ₹10,084 crore per annum, said I&B Ashwini Vaishnaw during a briefing on the decisions taken in the Cabinet.
The hike will reportedly mean an employee with a basic salary of ₹60,000 will receive an additional ₹34,800 as DA, an increase from the ₹33,000 amount they were paid after the March hike.
Earlier in March, the Cabinet approved a 2 per cent hike in DA for central government employees, benefitting nearly 1.15 crore employees and pensioners.
The 2 per cent hike was over the existing 53 per cent of the basic pay/pension, to compensate against the price rise. The March hike took the basic pay to 55 per cent, and now, if the three per cent increase gets approved, the total will go to 58 per cent.
What is Dearness Allowance?
Dearness Allowance (DA) is extra money that the government and public sector employers give to their employees and pensioners to help them cope with rising prices.
DA is calculated as a percentage of the basic salary and gets revised every six months based on how much prices have increased.
There are two types of DA, one for government employees and another for public sector workers. DA is taxable, so it has to be mentioned in income tax filings.
