Centre hikes DA by 3% to 34% of basic pay, effective 1 Jan 2022


NEW DELHI: In a big bonanza for 50 lakh central government employees and over 60 lakh pensioners, the Centre on Wednesday approved a proposal to hike Dearness Allowance (DA) by 3% to 34% of basic pay, effective 1 January 2022.

The proposal was approved by the Union Cabinet which met under the chairmanship of Prime Minister Narendra Modi.

The increase is in accordance with the accepted formula, based on the recommendation of the 7th Central Pay Commission, as per a government statement.

The increased in allowance will help employees part mitigate the impact of the erosion in their purchasing power following rising inflation. India’s retail, or the consumer price, inflation has remained above the upper-end of the Reserve Bank of India’s upper target of 6% for two months now amid a surge in oil prices are due to the Ukraine-Russia conflict.

The combined impact on the exchequer on account of increases in DA and DR will be 9,544.50 crore per annum. Dearness relief or DR is the quantum of amount provided to pensioners.

Dearness allowance was hiked by 3% to 3% in October last year.

DA is a component of the monthly salary paid to government employees to compensate for increased cost of living due to inflation. 

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