Centre notifies 34 per cent Dearness Allowance

New Delhi: Centre today notified its decision to give dearness allowance (DA) to 34 per cent from existing 31 per cent from January 1, 2022, benefiting about 47.68 lakh central government employees.

The Finance Minister Nirmala Sitharaman moved the cabinet note on March 30 for approval of releasing of an additional installment of 3 per cent of dearness allowance (DA) to central government employees and dearness relief (DR) to pensioners with effect from January 1, 2022.

The DA/DR has been increased by 3 per cent over the existing rate of 31 per cent of the basic pay to compensate for price rise and it is in accordance with the accepted formula based on the recommendation of 7th pay commission.

The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief will be Rs 9,544.50 crore per annum.

This will benefit about 47.68 lakh central government employees and 68.62 lakh pensioners, the release said.

The hike in the DA is as per the agreed methodology of taking average of Consumer Price Index-Industrial Workers for the past 12 months.

In October last year, the Cabinet had hiked the two allowances by 3 per cent to 31 per cent. It was effective from July 1, 2021.

Before that in July, the government had restored the dearness allowance and dearness relief and increased the rate of allowance from 17 per cent to 28 per cent.

Because of the COVID-19 pandemic, the central government had frozen the three additional instalments of the DA and DR, which were due on January 1, 2020; July 1, 2020; and January 1, 2021.

The Finance Ministry on Thursday has issued the order to implement the recent Cabinet decision to hike the dearness allowance of the central government employees, however, the central government pensioners’ anxiously awaiting their dearness relief (DR) order.